If you run a credit repair services business there will come a time when a client decides not to pay you. It won’t be fun and you likely won’t see it coming, but it’s not the end of the world and handling it correctly will protect your business, reputation, and sanity.
Developing a process that you can follow whenever someone skips out on their bill is something all business owners should do, but it’s important not to obsess over it and keep it all in perspective. On average, only 1% of clients will refuse to pay you and while it’s helpful to have a plan in place when that happens, focusing on the other 99% is what’s going to help you grow your business.
The obvious first part of this process should always be to halt work immediately, but there are other steps you should take in order to try and re-engage the customer and hopefully recoup payment. Above all, make sure to keep a level head and understand that this is part of the job and your energy is better spent gaining new clients than chasing old ones.
If you notice a trend of clients not paying their bills, take it as a red flag that something may be “off” in your processes. Ask yourself some “big picture” questions as the health of your business may be at stake and the unpaid bills may just be a symptom:
Typically when they perceive value in the service they get, they will readily pay your bill. Could the unpaid invoice signal an unhappy customer? How can you seek to better understand the needs and pains of your clients and offer valuable solutions?
Credit repair clients are not necessarily people who systematically do not pay their bills. Often they are people who had some misfortune (or simply an oversight) and are trying to get on the right track. But, before asking how to get paid by clients, ask yourself some questions about the clients you’re attracting.
Once you complete this internal audit and fix the root cause of the problem within your own business, you can proceed to handle the few “bad apples” who do not pay.
The first step toward answering ‘how to get paid by clients’ is outlining a schedule that explains when to do what. When it comes to the credit repair business, this timeline has 3 different components: pay date, timeline, and consequences that will help you determine what kind of grace period you will afford delinquent clients and what happens if they never pay.
All processes are not created equal and while yours is sure to evolve alongside your business, there are some pillars upon which it should be built. Taking the time to establish something now will save you the headache of having to develop it on the fly when you may be distracted or emotional.
If you’re using Credit Repair Cloud with Chargebee, then sending automatic payment reminders should already be built into your invoicing workflow. Your clients are human and if they simply forgot to pay you, then simply sending a reminder email is often all it takes to jog their memory.
We suggest setting this reminder for 3 days after the due date, so if payment is due April 1, the reminder will go out April 4.
If your automatic reminder goes unanswered, don’t hesitate to send a more personalized (but still civil) email as the next step. Again, you want to give clients the benefit of the doubt when it comes to non-payment and appealing to them on a one-to-one basis is an intelligent next step.
Always be graceful - even dealing with the 1% of “bad apples.” Protect your reputation - it may be the most valuable thing you have.
Using the same timeline as above, we suggest scheduling personalized follow ups at least 4 days after the automatic one goes out. So, if your reminder is sent on April 4, send something more personalized a week later.
There is no rhyme or reason to why people stop paying their bills and sending a final invoice informing them that you will be suspending their service is an easy way of trying to recoup your money one last time. Make sure to send a version that is amended with your “pay date” so they know how much time they have to pay.
If you follow the suggested 30 day timeline we mentioned earlier, try and send the final invoice 1 week before the pay date.
Sometimes the question of how to get paid by client is unanswerable. Take our advice when we say that nothing good will come of trying to chase down every dollar you’re owed - it’s much better for your sanity and your business to simply mark the client as suspended, prevent their login, and move on.
Instead, focus your efforts on attracting the clients you want and enjoying those that pay on time and appreciate your services.
Here is a timeline used by some credit repair professionals for dealing with customers who do not pay on time for their credit repair services. Feel free to use this as a basis for your own plan:
|
Elapsed Time |
Sample Date |
Activity |
|
April 1 |
Invoice due date |
|
|
+ 3 days |
April 4 |
Send an automated reminder |
|
+ 7 days |
April 8 |
Send a personal email |
|
+ 21 days |
April 22 |
Send final invoice |
|
+ 30 days |
May 1 |
Final Pay Date (Stop Work Date) |
Planning Ahead
The unfortunate reality is that unpaid invoices are a part of running a business and it’s likely that you will encounter it if you provide credit repair services long enough. If you’re just starting your business, learning how to get paid by clients is important. It’s best to take some time now to develop a plan of action but also remember to focus on serving and finding quality clients.
If you’re growing your credit repair business and are reading this because you’re facing a similar situation, it’s never too late to act. Documenting a process as you work through the issue can be just as effective as planning ahead, though you might be under more stress.
Whatever process you develop for your customers, don’t let it monopolize your time - it’s much more advantageous to simply write off the bad clients and turn your efforts to building your business.