From the mailbag: “How do you do collections while still trying to build relationships?”
If you work in sales, you have to be comfortable asking people for commitments, including the commitment to pay what they owe you. There isn’t any reason to be uncomfortable asking people for the money they owe you. And it doesn’t have to damage your relationships.
You might have trouble aligning the idea of asking for money with building relationships because you believe you are going to make your client uncomfortable. But this isn’t the case. The clients that don’t pay you in the terms of your agreement are very comfortable having a conversation with you about money. They have that conversation with their suppliers all of the time. They aren’t uncomfortable stretching you or asking you to extend your terms.
It’s impossible that you are going to hurt their feelings. They count on you feeling uncomfortable. That’s how they get better terms; you want their business, you feel uncomfortable, they stretch you a bit.
What About My Relationship?
It might make you feel like you will damage the relationship by asking to be paid what you are owed, but it doesn’t have to. In fact, it can actually strengthen your relationship.
By engaging your client in a conversation about paying up, you might be able to find a way to agree on terms that help them better run their business. I’ve seen some companies work with a client to give them 60-day terms, billing the client’s credit card on the first day of the billing cycle. This gave the client the 90-day terms they needed and got the company paid in the 60 days they needed.
Be not afraid of damaging the relationship. It isn’t likely.
Be Polite, Be Professional, Be Direct
The best way to ask for the money that you are owed is to professionally, politely ask. You might say something like: “Jim, I need to collect a check for invoices dated in May and June. Can you arrange for me to pick up a check and tell me when I drop by and grab it?”
Note that there is no judgment in this language. In your life as a salesperson, you will have clients that you have to hound for payment. There are some clients you will have to hound even though they have the money. They don’t lack an ability to pay; they lack a willingness to pay.
Sometimes you may be called upon to collect money when there is an issue. You have to be able to handle that too. You might need to say: “Jim, in order to meet your needs and demands, we need to be paid in the terms that we agreed to. Can you please set us up to be paid within those terms?”
You’ll get one of two results here. Either your client will set you up to be paid within terms, or your client will tell you why they can’t pay you in terms. If they can’t pay you within terms, you will have to renegotiate (maybe even renegotiating your price and their expectations).
You will have clients you have to ask for payment every time you are paid. But it doesn’t have to damage the relationship.
Can you collect the money you are owed and still maintain a healthy relationship?
What is the best way to ask for the money that you are owed?
How do you handle clients that have the ability to pay but lack the willingness?
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Filed under: Sales