No one likes playing the role of a collection agency. But sometimes a gentle reminder is necessary to flag outstanding invoices for clients. In these situations, diplomacy is key if you want to retain the client’s business in the future. Mastering the art of client diplomacy is beneficial for not just getting paid on time, but for all aspects of client relations.
In my experience as a treasury management professional, here are four lessons I have learned about maintaining good client relationships while still getting paid on time:
1. Make the process convenient for clients.
The easier it is for clients to pay you, the more likely they are to do so on time. There are a number of clear places to start. First, email invoices instead of mailing them. Clients check their email more frequently and can do so from anywhere. Similarly, offer digital options for payment. Rather than making your clients dig out their checkbook, write a check, and then find a mailbox to drop it in, you can choose to accept Electronic Funds Transfer or wire transfer. If your clients can pay you on their computer without even leaving their chair, you will see payments come in much faster.
2. Understand the reasons for late payment.
A client who is chronically late with payment may simply be unable to get the necessary approvals or have a structural cash flow problem with your invoice timing. Ask your clients when is the best time of month or quarter for them to receive invoices and, if it makes sense to do so, work around this timing.
3. Call, don’t email.
When a client is late with a payment and you have already sent reminder emails or notices, at a certain point it’s better to simply pick up the phone. You can’t control how an email you send is interpreted – clients may read your email as angry or threatening, which is likely to make them even more hesitant to address the issue. Over the phone, you can engage the client in conversation and identify the underlying reason for their lateness. Together, you can come up with a plan that works for both of you going forward and maintain a good relationship for future business.
4. Never approach clients with a negative mindset.
If a client is late with a payment, don’t assume that they are trying to cheat you. If you project an attitude of hostility in your interactions with clients, they will be defensive. Go into every conversation with the assumption that everyone is dealing honestly and in good faith, and that you can work together to find a solution for any problems that come up.
What client diplomacy secrets have you learned? I invite you to share your tips below.