Tips for Setting up Effective Payment Plans

Often times your customers just don’t have the balance in full to pay. Unfortunately many customers feel that if they cannot pay the debt in full then they avoid you all together. It’s a good idea to try to set up a payment plan with your customer that you both can agree on. Below you will find our top 5 tips for setting up an effective payment plan.

• Review your customer’s history before you call them. Have their account pulled up; know if they have offered you payments in the past and whether they followed through or not. Knowing if your customer has a job and where they work is important in deciding how much their payments could be.

• Have a plan. Know of two or more options for payment before you pick up the phone. Listen to what your customer says and be ready to offer them solutions to choose from. Offering your customer options while you are on the phone with them reduces the pressure on them to figure out what they are going to do. This will increase your chance of getting paid.

• Repeat everything to your customer. Before you hang up make sure you have gone over the complete payment plan with your customer. It’s also a good idea to send out a letter explaining what the terms of the payment plan, such as “$250.00 is due by the 15^th of each month; please contact us if you will not be able to make your payment.” This lets your customer know that you have documented their conversation, you know when their payment is due, and it shows them what you expect from them.

• Get the agreement in writing. If you can have your customer sign a payment agreement and return it to you it will assure your customer that you are serious about getting this debt paid. If your customer doesn’t return the payment agreement to you then you can carry on with your collection efforts, such as hiring a collection agency, because you know that your customer isn’t serious about paying you voluntarily.

• Follow up. Know when your customer’s payment is due. Follow up on that day if it is not received. If they do not hear from you, they could assume you aren’t really that worried about it getting paid.

Keep in mind that if your customer doesn’t follow through with their payment arrangement, it may be time to contact a collection agency. That way you can spend your valuable time working on your business and the agency can help you with your delinquent, unpaid debts.