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Different Types of Late-Paying Customers (And How To Deal With Them)

Nothing hits a business harder than clients who continually pay late. Some customers may not pay you at all, so if you have late-paying customers and you want to be able to deal with them properly then you can find out everything you need to know right here.

Customer Type One: Late Payer

As a business, you will encounter chronic late payers. This is a type of customer that will always pay eventually, but it will be months after you have asked them to. They may not even give you a reason why they are paying late, but they will quickly drain your cash flow if you are not careful with this. It helps to maintain a good list of customers who owe you money. When they are late, call them once the deadline has passed, and ask them how they plan to pay. You should also ask them when they are going to pay and keep on them until they do.

Customer Type Two: “Forgotten Payment Details”

Some customers have the remarkable ability to misplace your bank details right when it’s time to pay. To stop dealing with these types of customers, it helps to include your bank and payment detail information on your invoice. Don’t put it in a small font and don’t hide it away on a website page either. You may even want to set up some payment software so that they can pay you in one click as well, as this is a great way to increase the payments you receive.

Customer Type 3: Genuine

If your client hasn’t paid yet, don’t always assume that they are doing so maliciously. Some people genuinely go through financial difficulties and it might be that they are going through some financial problems of their own. Have the courage to have “that” conversation with them and pick up the phone to see if they need more time. If your customer has a good record with your company, don’t tar them with the same brush as those who continually and intentionally pay late.

Customer Type 4: Houdini

This is quite possibly the worst type of customer that you are going to have to deal with. The ones that happen to vanish from the face of the earth without so much as leaving a trace. Debt factoring is a great way for you to deal with these customers because they probably had no intention of paying you in the first place and this can wreak havoc on your business income. You may find that you are thousands out of pocket with no idea what to do about it, and to avoid this, you need to make sure that you are asking for a deposit every time someone orders. Remember that it is impossible for this type of customer to come back because they owe you money so to prevent this you’ll need to have a business-wide deposit scheme in place. This is the only way for you to really try and stop this type of thing from happening.