Creating Fair Payment Plans
Managing overdue invoices doesn't have to damage customer relationships. With the right approach, you can create payment plans that help customers catch up while maintaining positive business relationships.
Why Payment Plans Work
Payment plans offer several benefits:
- Maintains relationships: Shows customers you care about their success
- Increases recovery rates: Structured plans are more likely to be completed
- Reduces stress: Both parties know what to expect
Key Principles
When creating a Good Plan, keep these principles in mind:
- Be realistic: Base payment amounts on the customer's actual ability to pay
- Stay flexible: Life happens - build in room for adjustments
- Communicate clearly: Set expectations upfront
- Follow up neutrally: Check in without pressure
Structuring the Plan
A typical payment plan might look like:
- Duration: 3-6 months for most invoices
- Frequency: Bi-weekly or monthly payments
- Amount: Consistent installments the customer can afford
Example
For a $1,200 invoice:
- Monthly payments: $200/month for 6 months
- Bi-weekly payments: $100 every 2 weeks for 12 payments
The Human Element
Remember, you're working with people, not just numbers. A calm, respectful approach leads to better outcomes for everyone.