Bob Schultek

Bob Schultek

Sales folks are most often compensated for the orders they book. This makes sense – without orders, there is no business. But getting the order is only part of what makes your business successful. Getting paid for the order is what defines a profitable contract. Positive cash flow is compulsory for every business. Proficient salespeople realize that they share responsibility for ensuring that their company gets paid for every order they book.

Make your payment expectations clear at the beginning:

  • Specify your payment terms in your proposal, connect them with your quoted price and negotiate them together.
  • Make it easy for customers to pay you. Consider direct deposit, early payment incentive, online or down payment/partial payments to ease customer cash flow and reduce your liability.
  • If an order will have a large impact on your bottom line, run a credit check before signing a contract.
  • Include your agreed payment terms and due dates in your purchase Agreement and require that your customer sign the written Agreement.

Given the economic challenges during the last few years, collecting what is owed by a customer has become a significant issue. Prompt payment typically results from the following actions:

  • Produce what you promised! Confirm this with the customer without mentioning payment due.
  • Always let the customer pay when they offer. If the customer is happy to pay up front – let him!
  • Make arrangements for some payment to occur when you deliver the final product or service.

If payment is late:

  • Begin by asking your customer positively and respectfully if they realize they’re behind on their payment and when you should expect to receive it.
  •  Work with the customer to develop a payment plan. Coordinate any post-sale support or maintenance services with the payment schedule in this plan.
  •  Increase the frequency of follow-up calls (once a week > every 3 days > every day) until you receive full payment.
  •  Before contacting a collection firm, first advise the customer and specify a date after which you will be forced to refer collection to an outside organization if payment is not received.

You and your customer both expect to get paid for your work. Make it easy for your customer to compensate you, but if payment is delayed, seek first to preserve your relationship by working with your customer to productively resolve the outstanding amount due.

How do you ensure that your sales personnel retain the connection between price and terms?

What terms do you use to make it easy for customers to pay you?