Regardless of the economy, there will always be customers who don't pay their bills on time.
Your efforts are complicated by your unique relationships with customers and the responses they have to different collection strategies. To improve results, consider customizing guidelines for each account.
These guidelines help your billing department balance its collection efforts with your company's relationships with customers.
Make sure that each customer file contains the following information:
The more documentation your accounts receivable managers have, the better they can adapt their tactics to individual customers. The result is likely to be a higher rate of success.
1. Not having a standard policy. Whether or not your company customizes efforts for each account, your credit policy should be standard and written. Include the payment due date and the steps that will be taken if payment is not made. Also, make sure customers know there is a fee for late payments.
2. Not acting early. As soon as you realize payment is not forthcoming, make a call or send a letter. It could be that the payment schedule is the problem, and a minor revision will get the checks flowing.
3. Not following up on previous efforts. Collections are not fun and it may be tempting after making a call to set it aside for awhile. But that gives the customer the impression that the heat is off for the time being. Instead, keep the contact information handy and if payment isn't made when promised, call again.
4. Being too soft. With today's caller ID technology, it's easier than ever for customers to avoid your calls. Be persistent until you make contact. And when you reach them, set a firm date for payment. Otherwise, you could spend days wondering if the check is in the mail.
5. Not stepping it up. If payment is still not forthcoming, don't just keep doing the same things to collect. Increase your efforts to let the customer know you mean business. Be sure you are in compliance with laws applicable to collection in your area.
Get in touch today and find out how we can help you meet your objectives.