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If you’re like many small businesses, even a few late payments on your accounts receivable can seriously crimp cash flows. It is extremely important that you take immediate and systematic measures to limit the number of default claims you at any time. The number one strategy is to have a system in place that limit the number of bills passed because in the first place. There are numerous tools and techniques to do just that. However, today, we will concentrate on how to deal with past dues when they appear
Here are some tips that will help you to reduce the outstanding requirements :.
· mountain immediately. Never wait more than 3 working days past the due date to contact customers. This allows for mail delays, but early enough to reach the position before it becomes worse.
· When you contact a customer, do not give them an excuse to use (“Did you receive the invoice?”). Rather, ask them, “When did you send your payment?” If they tell you that there has not been sent, ask them if they will send it today. If they say “no,” ask when they expect to send it. Get commitment from them and follow if the commitment is not honored.
· Ask your customers why they have not paid the bill. Remember, if they are honest with you, you should be treated with utmost respect. All have cash flow issues from time to time and their treatment will be remembered long after their problems are over and they are looking to purchase products or services you offer again. As a matter of fact, the right etiquette when gathering could not only lead to get paid faster, but can also allow you to keep them as customers for life. You see, if they are indeed in trouble, chances are that there will be many who will not treat them very well and this will sour their relationship going forward.
• If you get an excuse, remove emotions from the equation and deal with situations logically. Getting definitive commitment on the date or time when you can expect to receive payment from them. Make sure that you are in agreement, so that there can be no claims of misunderstanding later. Find out how (mail, credit card, etc.) and when. Then note in our conversation so that you can follow immediately if the commitment is not honored.
· If they give you a good reason (“My product was faulty”), try to remedy the situation, if it is within your control. For example, if you find that the product was indeed defective, ensure that new, blemish product is delivered immediately.
· If the client is a larger company, understand that they will usually pay their bills on schedule. You need to know when your accounts must be received by them in order to be included in a weekly, bi-weekly, or monthly payment cycle. If you find yourself with a default of one of these companies, be sure to call or contact them for a few days for the time to make sure they have all the documents they need to include an account of their payments.
These are just some of the many proven steps you can take to collect requirements when they are in arrears. To limit future past fees, you will need to review the entire procedure. To compete in business today, you will almost certainly have some level of credit for your customers. The key is to limit it to those who will pay you! If the process needs an overhaul, it is important to address these issues immediately. But sales are important, it is still cash is king!
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