Getting Paid!!!!!

It goes without saying that for many business owners, collecting on accounts receivables can be challenging especially as more people switch from established collection procedures to online payment methods. The good news is that the small business owner can take positive actions to improve collection rates, shorten the aging days of your accounts receivable, improve the business cash flow and tighten up its credit and collections policies. While some of the tips discussed here may not be suitable for every business most can serve as general guidelines to the small business more financial stability.

Define and stick to a concrete credit policy

It is imperative that the small business define and stick to concrete credit guidelines. Your sales force should not sell to customers who are not credit-worthy, or who have become delinquent. You should also clearly delineate what leeway salespeople have to vary from these guidelines in attempting to attract customers.

It is of vital importance that you have a system of controls for checking out a potential customer’s credit, and it should be used before an order is shipped. Further, there should be clear communication between the accounting department and the sales department as to current customers who become delinquent.

Clearly Explain Your Payment Policy

Invoices should contain clear written information about how much time customers have to pay, and what will happen if they exceed those limits.

Making sure that invoices (both paper and electronic) include a telephone number and website address so customers can contact you with any billing questions. If you send an invoice via the US mail, also include a pre-addressed envelope.

Timing is everything

The faster invoices are sent, the faster you receive payment. For most businesses, it’s best to send an invoice when you complete the service or with a shipment, rather than in a separate mailing or online invoice days or weeks later.

Follow Through on Your Stated Terms

If your policy stipulates that late payers will go into collection after 60 days, then you must stick to that policy. A member of your staff (but not a salesperson) should call or email a reminder invoice or notice of late payment to all late payers and politely request payment. Accounts of those who exceed your payment deadlines should be penalized and or sent into collection if that is your stated policy.

Train Staff Appropriately

The person you designate to make calls to delinquent customers must understand the seriousness of and the professionalism required for the task. When calling a delinquent payer, the caller should:

• Become familiar with the account’s history and any past and present invoices.
• Call the customer and ask to speak with whoever has the authority to make the payment.
• Demand payment in plain, non-apologetic terms.
• If the customer offers payment, ask for specific dates and terms. If no payment is offered, tell the customer what the consequences will be.
• Take notes on the conversation.
• Make a follow-up call if no payment is received and refer to the notes taken as to any promised payments.

Switch to an Online Payment System

Studies show that customers and clients prefer to pay with debit and or credit cards or EFTs vs. checks and to have multiple payment options (including traditional paper invoicing) available to them. Furthermore, when you use the latest online payment technology clients are more likely to feel that you run a more efficient streamlined operation and are “up-to-date.”

If you are a business owner who is struggling to get paid on time or are ready to make the switch to an online invoicing and payment system, help is just a phone call away.

User | 27/11/2019