• Money

IT’s just good business to offer your customers options for making payments. These options can include payment plans, using credit or debit card, online payments, checks, cash, money orders, cashiers checks, automatic withdrawals or western.

“People tend to resist that which is forced upon them. People tend to support that which they help to create,” says author Vince Pfaff. I am sure you can relate to this quote and so can your customers. When you call a past due customer and demand payment in full you won’t get as far if you called and offered a couple of different options for payment plans.

Here are some suggestions for setting up realistic payment plans for your customers. One thing you must do is to make sure your customer knows you understand that every situation is different, and that you will take into consideration their ability to pay, the amount unpaid, their payment history, for how long they have been a customer, and specific reasons why the account is past due. Make sure your customers know that setting up these payment agreements can’t be done all the time; you’re doing it now because there is a problem and you want to resolve it. Often, customers get very comfortable charging more products or services and just making the monthly payment plan payment. Avoid this by putting every agreement in writing with a start date and an end date. Some companies have rules about payment plans, including not entering payment plans by one customer more than once a year or requiring a 15 percent deposit for all new plans.

With the economy a mess and more consumers unable to pay their bills, the objective of setting up payment arrangements is to at least get paid something rather than nothing. Most customers will look at all their bills and then make a decision on which ones will get paid that month based on what is most important to them. It is your job to make your invoice important to them and offer them realistic options so they will pay it each month. You want to effectively outline policies and procedures that will help provide your customers with options when they cannot pay in full.

Something to remember if you don’t like the idea of offering payment plans: If someone owes you money, they probably owe others money, and who ever takes action first or offers a solution, will get paid first.

When setting up your paymentagreement:
1. Review your customer’s history before you make the call.
2. Have two or more options for payment arrangements in mind before the call.
3. Repeat everything to the customer.
4. Get it in writing and then have your customer sign it.
5. Follow up and follow up.

©Entrepreneur April 2011 by Entrepreneur Media, Inc. All rights reserved.

©Entrepreneur May 2011

MICHELLE DUNN is an award-winning author and columnist and has been called the U.S.’s authority on collecting money. She is the founder and CEO of Michelle Dunn’s Credit & Collections Association, and is one of the top 50 most influential collection professionals in the industry.

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cash, cashier check, checks, companies, customers, debit card, deposit, economy, Michelle Dunn, money order, online payment, payment, Vince Pfaff, withdrawal