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Maureen Stephenson: Handle potential billing snafus face-to-face

Know The Score

Posted: April 11, 2009 12:12 a.m.
Updated: April 11, 2009 4:30 a.m.
 
An entrepreneur called me the other day for some brainstorming.  It seems that he discovered his company had been billing a client half of what he should have been billed.  This client had been difficult in the past and the entrepreneur wasn’t looking forward to dealing with him.  He knew he had to do something though, and his partner felt it had to be done in a face-to-face meeting with the client. They felt the client had to know what was going on before getting revised pricing and a bill for the oversight.

Much to his chagrin, I agreed with his partner and told him if he thought the client had been difficult in the past, just wait until he opens the bill for the six month’s past-due amount. The matter had to be handled personally before presenting the bill.

Sending such a bill without the personal meeting is like dropping a bomb on the client’s desk, with the fallout falling squarely on my friend’s head.  Now the question is, how do you collect money that is rightfully owed to you?  I thought I came up with a brilliant solution for him when I suggested he have his partner call the client.

Seriously though, whether the client owes you the money or not is a moot point.  You’ve made an accounting mistake, but if the client agreed to pay a certain amount in exchange for certain services rendered, the money is owed without question.

I’ve found in situations like this, it’s always best to be proactive and face the problem as quickly as possible.  This saves hours of needless worry and fretting, and most times the problem isn’t as big as we make it when we stew over it.

There can only be three outcomes to my friend’s situation:
  • The client will understand and pay him without argument.
  • He will argue the point, forcing him to offer a compromise plan.
  • He will flatly refuse to pay, forcing him to decide how far he’s willing to go to collect what is owed.
You should be prepared for all possibilities when you face the client.  Remember, in a business negotiation, he who is prepared the least gives up the most.

I went on to tell him how I’d handle the client, which was to meet with him in person. This was much better than trying to explain things on the telephone, because most people only give half their attention to you on the phone. Once you’re in front of the client, downplay the fact that an error was made, especially since the error didn’t negatively affect your service to him. You might try poking fun at yourself over the situation — but only if the client has a sense of humor.  Then politely ask if the client would prefer to have the unbilled balance included on his next invoice, or submitted as a separate invoice.

Then close your mouth, smile and wait for his response.

I pointed out to my friend  by doing this, he didn’t give the client the option of not paying. Rather, the only option is how he’d like to handle the payment.  Being the wonderful person that you are, you’re willing to let him choose.

I haven’t heard the outcome from my friend yet, but I’m willing to bet that the client chose either the first or second option. If this client had been difficult in the past, he could have argued that since it was my friend’s mistake, he shouldn’t have to pay the bill. 

This, of course, is not a valid argument, but he should be prepared for such an event.

If your business can survive without collecting the unpaid balance and you really want to maintain a relationship with this client, you should be prepared to offer a compromise that lets the relationship continue. Without appearing to be caving under the pressure, look the client dead in the eye and say, “Mr. Client, since I value your business and the billing mistake indeed was my error, I’m willing to forgo collection on the unpaid balance and start billing the correct amount on your next invoice.”

Which, by the way, you should have in your pocket.

Granted that in this situation you are not going to collect the past balance, but you’re establishing the rules of the game for the future, and it might even improve your relationship with Mr. Difficult. The money you forfeit today could lead to an increase in referrals, testimonials and repeat business tomorrow.

“Make Money Writing” by Dr. Stephenson covers topics from self-publishing to copywriting and everything an author needs to make sales. Her column represents her own views and not necessarily those of The Signal.

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