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Give Your Customers Payment Options When someone is past due, being flexible is the best way to get what you're owed.

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It's just good business to offer your customers options for making payments. These options can include payment plans, using credit or debit card, online payments, checks, cash, money orders, cashiers checks, automatic withdrawals or western.

"People tend to resist that which is forced upon them. People tend to support that which they help to create," says author Vince Pfaff. I am sure you can relate to this quote and so can your customers. When you call a past due customer and demand payment in full you won't get as far if you called and offered a couple of different options for payment plans.

If you have never set up payment plans before I have some suggestions for setting up realistic payment plans for your customers. One thing you must do is to make sure your customer knows you understand that every situation is different, and that you will take into consideration their ability to pay, the amount unpaid, their payment history, length of time they have been a customer, and specific reasons why the account is past due in working out a payment solution with them.

Related: 25 Payment Tools for Small Businesses, Freelancers and Startups

Make sure your customers know setting up these payment agreements is not something that can be done all the time; you're doing it now because there is a problem and you want to resolve that problem. Often, customers get very comfortable charging more products or services and just making the monthly payment plan payment. You can avoid this by putting every agreement in writing with a start date and an end date.

Some companies have rules about payment plans. This could include not entering payment plans by one customer more than once per year or requiring a 15 percent deposit for all new payment plans.

With the economy a mess and more consumers unable to pay their bills, the objective of setting up payment arrangements is to at least get paid something rather than nothing. Most customers will look at all their bills and then make a decision on which ones will get paid that month based on what is most important to them. It is your job to make your invoice important to them and offer them realistic options so they will pay it each month. You want to effectively outline policies and procedures that will help provide your customers with options when they cannot pay in full. Something to remember if you don't like the idea of offering payment plans. If someone owes you money, they probably owe others money and who ever takes action first or offers a solution, will get paid first.
Related: The 15 Most Popular Online Payment Solutions
When setting up your payment agreement:

  1. Review your customers history before you call
  2. Have two or more options for payment arrangements in mind before the call
  3. Repeat everything to the customer
  4. Get it in writing and have your customer sign it
  5. Follow up and follow up

Michelle Dunn is an award winning author and columnist and has been called the nation's authority on collecting money. She is the founder and CEO of Michelle Dunn's Credit & Collections Association, one of the top 5 women in collections, and one of the top 50 most influential collection professionals in the industry.

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