Unpaid balances. Your biggest nightmare. Who wants to collect money? Can’t we all just dance? You aren’t alone if you can relate.

Although unpaid balances might be a nightmare, they have to be taken care of. After all, the success of your business relies on revenue coming in from these people.

Here are some ideas for you to consider when brainstorming ways to decrease your unpaid balances.
1.  Special payment plans: 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.
2.  Upfront payments: Deposits, down payments and retainers can all help protect your business.
3.  Card on file: Require everyone to have a credit card on file. Even if they aren’t charged automatically each month, you will at least have it on file and can charge it if they are x amount of time late on a payment.
4.  Hold costumes: In order for students to pick up their costumes, the account has to be paid in full. No costume means no recital.
5.  Penalties: Start with a clear policy stating that late payments will incur a penalty. Let customers know that a small interest amount will begin to accrue following the due date if you haven’t received any payment. Of course, if a customer has been prompt in the past, you can always decrease or waive the penalties if they agree to pay by a given date.
6.  Discounts: Offering discounts—say, 5% off for people who pay in advance—both rewards good customers and pays you back in the form of saved administration costs.
7.  Be proactive: Stay on top of who is behind with email statements or phone calls. Have your office staff keep up with this on a monthly basis to make sure your customers are notified.
8.  Accept all forms of payment and encourage credit card payment: If possible, take credit cards. In this way, you are sure to be paid in timely fashion even if the client doesn’t have the funds at the current moment.

What do you do for late payments? Do you like these ideas?