EFFECTIVE SALES MANAGEMENT

When you're running your own small business, you often feel as if you need four pairs of hands and eyes in the back of your head. Psychic abilities wouldn’t hurt either.

Most of your clients will be wonderful, but some will be difficult. Slow-paying clients fall into the difficult class and, unless you have a system in place to manage them, they can seriously damage your cash flow.

The following is a simple system for managing slow-payers:

1. Get it in writing.

If you provide a service, you need a basic agreement that you automatically give to all clients. You can tailor this basic agreement as necessary.

For example, when new clients hire me for a copywriting project, I send them the following:

Writing Services Agreement

“Your signature below authorizes me to write copy for the project above, for the fee stated.

Two revisions are included if requested within five days of your receipt of copy and are not based on a change in the assignment brief made after the copy is submitted. Balance of payment is due on receipt of the invoice.

You understand that the assignment is work done for hire, which gives you the copyright. You release me from any responsibility for legal or other problems that may arise from the use of any copy I write for you.”

The agreement covers the details of the project, as well as the terms of payment.

Most clients readily sign the agreement. Even if you have a rush job, always insist on an agreement in writing. You can fax the client your own agreement, or they can fax you a purchase order.

Without the details of the project in writing, both parties might forget what was said between them. Take the time to write out the details of the project so that everyone understands exactly what work is to be done and for what cost.

2. Follow up on payment.

Even with a signed agreement, some clients extend the payment period. I usually give a grace period of 30 days, after which I follow up with an e-mail reminder. If I still do not receive payment, I follow up again each week, either with an e-mail message or with a phone call. Eventually, the client pays his bill.

3. Keep the cash flow steady.

• Bill your client as soon as you've provided the service. I provide two revisions of copy, if necessary, and then invoice as soon as I've completed the work.
• If you anticipate heavy expenses, bill the client up front for a portion of those expenses.
• For long projects, bill at stated intervals. Once a week is reasonable, once every two weeks is too long. Don't continue work without getting paid. Be inflexible about this.
• Check your finance program to see whether it has a reminder feature. If it does, set it to remind you to follow up regularly on slow payers.
• Keep your cool. Be calm, polite, and completely professional when you follow up with slow payers.

The occasional difficult client is a fact of business life. But if you have a system in place for dealing with the collection of bills, you will be able to handle slow-payers quickly and efficiently.

Author: James A. (Jim) Baker
James A. Baker is the Chairman and Founder of Baker Communications. Baker is a sales training and development company specializing in helping client companies increase their sales and profits. He can be reached at 713-627-7700 or jim.baker@bakercommunications.com.