I work in a SaaS enterprise, the equivalent of a gym membership. The client knows they should use it because it's good for them (earns them $$$) and once they're in the swing they love it. But despite my best efforts at UX, the subject matter is inherently dry for creativity, and if they get distracted or hesitant, they tend to stop “going to the gym.” As a "personal trainer" I have to stay vigilant to keep everyone happy and motivated or I'm losing clients...hence interpersonal skills.
Some clients don't pay their bills on time and the system automatically cuts access to profitable parts (along with a courtesy email to their accountant and account manager). Once a month, a user emails me and says (to paraphrase his tone), "I can't access my data because you're too late. I'm trying to get work done and it's making it difficult. Can you restore access please?"
(For context, on this moment I respond to something like " Sorry, it automatically logs you off when your account is past due. I have restored access. [name of acct manager on copy] processed invoice “By what date can we expect payment? »)
Can anyone give me an explanation of these users' attitudes and a strategy for what I can say or how I can behave:
- Increase the likelihood that you will be paid on time and at the same time;
- make those users happier as a result of those actions (i.e., avoid "enforcing" payment compliance through penalties. I can think of a lot of enforcement actions I could do that would reduce the user's happiness).
Clients about whom we're talking about, usually refer to Latin American countries.
42 answers
Some clients don't pay their bills on time, and the system automatically reduces access to profitable parts (along with a mailing letter to their accountant and account manager).
How is this letter written? Do clients/users receive it or just the accounting department?
Was the user warned that they would be disconnected from the service?
A simple solution would be: when a payment is late, send a friendly reminder first, both for the account and for the actual user. Then, wait two weeks, send another reminder, and only turn off the service after, say, a few days.
This should leave them enough time to either pay or remember accounting to do so. This also ensures that they will not have unpleasant surprise when their service will be cut because they have been warned...
The reaction you don't want is "Damn, this thing doesn't work!" but you need a reaction: “Damn, we forgot to pay!”
The error page should also say something like:
"Please make sure your spam filter is set to accept the two warning messages we sent you in previous weeks to avoid further inconvenience."
One of the company owners asked for recommendations on how to collect receivables. Here's a short excerpt from the new book, Financial Planning: The Art of Creating Income.
The work of collecting payments has its own technology, which consists in the fact that the client needs to be reminded in time, gradually increasing the pressure. This requires a very high level of discipline, organization and the ability to demand fulfillment of obligations. Such qualities are not typically found in salespeople, whose talents tend to be to quickly build trust and maintain interest.
1. Phone call with a friendly and polite reminder that the client must pay the invoice within the next 3 business days.
2. Call on the last day of the payment deadline. In the middle of the working day, the client is asked whether payment has already been made. If payment is not made, he is kindly but firmly reminded that he has committed to pay within that time frame, and is required to pay by the end of the day.
3. If the client does not pay on time, the next day he should be sent a letter by fax or e-mail. The letter must include a requirement to pay or penalties will apply.
4. After sending such a message, you must call and demand that he either pay within a day or provide an official letter with the date of payment.
5. If there is no payment and there was no letter asking to reschedule the payment, you must call the next day and demand an official letter.
6. If the client does not send a letter within a few more days, he is sent a formal complaint with a warning that the case will be sent to court if within certain period no payment will be made.
7. If the client has not complied with the requirements, send all Required documents lawyers and start a lawsuit.
This sequence may seem too harsh, but this is just an example, you can develop a softer one based on it. Please note that in order to perform this work, the employee must enter the “1st level impact” task into the calendar for each account, and then punctually complete this task. In order not to miss any payments, he must maintain the appropriate tables and constantly work with the calendar. Performing a Level 2 “impact” requires calling not just on a certain day, but at a specific time. Sellers, as a rule, simply forget to do this. When you consider that a company may have dozens or hundreds of outstanding invoices, this is a fairly large amount of very specific work. When they try to entrust such work to sellers, the result is always the same - they often cannot complete even the first step on time and correctly, they are almost guaranteed to “forget” about the second, and they are afraid to even think about the subsequent steps.
When we implemented a “gradually increasing pressure” approach, it always resulted in increased revenue and a significant reduction in accounts receivable. After all, most clients make payments quite chaotically; they pay first of all to those who demand payment. Of course, this approach may result in the company losing a small portion of customers, but, oddly enough, such losses also contribute to revenue growth. The reason for the increase in income is not difficult to understand - sellers, instead of clinging with all their might to problem clients, are forced to look for new ones. At the same time, the company gets rid of clients who eat up resources ( working capital And work time), they go to competitors and create difficulties for them in their work. But, interestingly, when implementing this approach, the most disagreement arises from the sales department; they always say the same thing: “We will lose clients, everyone will leave us, it’s better that we collect payments ourselves.”
One of the company owners asked for recommendations on how to collect receivables. Here's a short excerpt from the new book, Financial Planning: The Art of Creating Income.
The work of collecting payments has its own technology, which consists in the fact that the client needs to be reminded in time, gradually increasing the pressure. This requires a very high level of discipline, organization and the ability to demand fulfillment of obligations. Such qualities are not typically found in salespeople, whose talents tend to be to quickly build trust and maintain interest.
1. A telephone call with a friendly and polite reminder that the client needs to pay the invoice within the next 3 business days.
2. Call on the last day of the payment deadline. In the middle of the working day, the client is asked whether payment has already been made. If payment is not made, he is kindly but firmly reminded that he has committed to pay within that time frame, and is required to pay by the end of the day.
3. If the client does not pay on time, a letter should be sent to him by fax or email the next day. The letter must include a requirement to pay or penalties will apply.
4. After sending such a message, you must call and demand that he either pay within a day or provide an official letter with the date of payment.
5. If there is no payment and there was no letter asking to reschedule the payment, you must call the next day and demand an official letter.
6. If the client does not send a letter within a few more days, he is sent a formal complaint with a warning that the case will be sent to court if payment is not made within a certain period.
7. If the client has not complied with the requirements, send all the necessary documents to the lawyers and begin legal proceedings.
This sequence may seem too harsh, but this is just an example, you can develop a softer one based on it. Please note that in order to perform this work, the employee must enter the “1st level impact” task into the calendar for each account, and then punctually complete this task. In order not to miss any payments, he must maintain the appropriate tables and constantly work with the calendar. Performing a Level 2 “impact” requires calling not just on a certain day, but at a specific time. Sellers, as a rule, simply forget to do this. When you consider that a company may have dozens or hundreds of outstanding invoices, this is a fairly large amount of very specific work. When they try to entrust such work to sellers, the result is always the same - they often cannot complete even the first step on time and correctly, they are almost guaranteed to “forget” about the second, and they are afraid to even think about the subsequent steps.
When we implemented a “gradually increasing pressure” approach, it always resulted in increased revenue and a significant reduction in accounts receivable. After all, most clients make payments quite chaotically; they pay first of all to those who demand payment. Of course, this approach may result in the company losing a small portion of customers, but, oddly enough, such losses also contribute to revenue growth. The reason for the increase in income is not difficult to understand - sellers, instead of clinging with all their might to problem clients, are forced to look for new ones. At the same time, the company gets rid of clients who eat up resources (working capital and working time), who go to competitors and create difficulties for them in their work. But, interestingly, when implementing this approach, the sales department has the most disagreement; they always say the same thing: “We will lose clients, everyone will leave us, it’s better that we collect payments ourselves.”
Lessons.
So, today we will talk again about freelancing and the difficult fate of those who choose remote work.
If you have never worked with clients who are seriously late in payments, or with those who do not pay at all, then you can only be envied. In reality, freelancing often comes with similar problems. We can say that paying for freelance work is almost the Achilles heel of the entire concept of remote work.
This happens and there is nothing worse for a professional than putting your soul into a project, and as a result receiving only an apology or a banal “frost”. And while banks do not accept “sorry” and “thank you” as payment, you need to do something to reduce the number of such incidents to 0.
In reality, you can stumble upon unscrupulous customers almost everywhere, and the size of the companies is not the main thing. Unscrupulous clients come across both small local businesses and large companies with offices throughout the country. The only similarity between them is that they start fooling you with promises to pay you “as soon as you do this.” They will praise your design and feed you promises of future projects and recommendations to their partners, but the fact will remain a fact - you will sit without pay until you stop working for them.
Such incidents seriously hurt both your pride and your bank account. Fortunately, there are several ways to organize payment for freelancing services that will allow you to significantly reduce the number of dummy clients, especially when you don’t have a lawyer you know to sue the hell out of such companies or individual clients.
Majority large companies prefer to pay for freelancing with some deferment. Some because of deferred payments on the part of their clients, others - after coordinating the work with three directors, neighbors in the corridor and the cleaning lady Aunt Glasha, and others - because Jupiter is in the Saturn zone. And many freelancers agree to these enslaving conditions.
And this is great, but it’s great only for customer companies. This causes you a lot of problems and days of empty waiting. If you are hired for a project, the work must be paid immediately upon completion actual work. If there are no delays in your work, then there should be no delays in payment - start respecting yourself as a professional.
But how can you get customers to pay on time for your services? Let's understand this with simple examples and steps. To reduce the number of non-paying customers, all you have to do is stick to simple rule - you do not do the work until you receive payment for the previous stage.
For better financial control, create an account in a popular payment system, and also make some kind of widget with the ability to pay online directly to your bank card. Yes, this will cost you a few extra percentages, but it will greatly simplify the process for customers and allow you to better control a large number of small transactions.
« No pay, no further work» - this principle should be fundamental in working with clients. Do not be afraid to mention this in negotiations with clients. For the vast majority, it will be easier to pay you in small tranches for each successfully completed stage.
If your job does not involve fixed costs for anything, then here is an approximate list of how you can organize payment for a project so that, on the one hand, you can see the client’s interest in working with you, and on the other hand, remain motivated until the end of the project:
- Prepayment - 10%
- Prototyping - 20%
- Design/coding of main elements - 30%
- Creation of remaining elements - 30%
- Testing + some final edits - 10%
Of course, this list is not a rule and you can move the percentages back and forth depending on the specifics of your industry. But practice shows that the more you worry about dividing the project into so-called milestones, the less risk there will be to complete a whole project and receive a “BIG thank you” for it.
And there is nothing wrong with asking for advance payment even for small projects. Remember that by agreeing to them, you are reserving some time in your schedule to complete. And by staking out time on such a project, you may lose the opportunity to take on another, larger project. These are all risks that should always be taken into account.
Your clients need to understand that work doesn't start until:
- You will not receive payment. If a client complains about having to pay before the work actually starts, he will most likely be a pretty bad client and cause you a lot of problems. Remember, if you refuse other projects and wait for progress on this one, you should receive a deposit to insure yourself against wasting time waiting.
- You and the client will read, understand and sign all points of the offer. A proposal will not become a working plan until both parties agree to every point of the plan. Only in this case will the document begin to reflect the point of view of both sides.
- Client will not start work on homework. Waiting for data, photos, graphics, presentations and Word files with texts not only makes your nerve cells burn out faster, but also makes significant shifts in time. Don't start work until you have full list necessary information- this will only motivate and discipline the customer.
The approaches described here in some cases may seem a little uncomfortable to discuss with a new customer, who can easily “off the hook”. But does the level of discomfort compare with those cases when you did the work and you were not paid? No? That's the same!
By increasing sales, we will inevitably come to credit the buyer, allowing him to defer payments. For some companies, accounts receivable becomes a headache - it is not clear how to collect it. To others, buyers bring money joyfully and on time. Today in our blog we’ll talk about how to motivate a client to pay on time.
Every business has receivables, but successful companies are distinguished by the fact that they know how to manage them. Frantically calling or visiting clients at the end of each quarter in order to collect at least something is not our method. We are not calling for a complete abandonment of deferred payments. You just need to know who, when and how much to give. We have already dealt with the question of WHO, today we will talk about WHEN and HOW MUCH.
- Divide and rule
If you work according to the factoring scheme, then it is she who will check your buyer, evaluate him, and set a financing limit. Consider for yourself whether all this work is worth the commission you will pay to the factor.
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