The accounts receivable department is one of the most important features of any business. If your accounts receivable is not working properly, the rest of your business will not function properly either.
Some of you might be facing this problem this very second. I am here to help. Here are some special tips from a popular invoice factoring company which will hopefully set you back on the right track.
1) Consider switching to an electronic system. This will ensure that everything gets sent out and received on time. Let’s be honest, the US postal service tends to be slow. Unless you label something “First Class” “Priority”, the time frame for getting something tends be lengthened.
If you do things electronically it will go smoother for you. This way you won’t to call up clients asking where their payments are. They won’t have to call you up asking if you have received something yet.
2) Consider reducing the terms of your payments. It used to be that companies would allow 30 days or more for a payment to come in. This gave procrastinators a chance to put things off even more, even making excuses for why they haven’t paid for something yet.
When you choose email for your invoicing, it’s going to allow for the payment to go through right away. This cuts down on lots of frustration. Once your client clicks on the button, than you will receive the payment.
This will also help you to separate your clients into two groups. The ones who pay on time and the ones who do not, leaving you to deal with those who pay late accordingly.
3) Keep a healthy and positive relationship with your clients. If you make them feel wanted with your company, they will more than likely pay on time. If you treat them like a number, your clients will most likely not want to give you their business, even if it means paying a bill late.
Be sure that your clients know they are appreciated, otherwise it’s not going to work out in your favor.
4) Think about offering several options for payments. Some companies will only offer one or two methods. If someone can’t afford to pay you in this fashion, they are less likely to do business with you.
Try offering 4 or 5 ways to take payments. Clients who have more options are more likely to be happier with your services. Try to work things out payment-wise with your clients. Those who have tough circumstances will appreciate you more for it.
Do not resort to collections unless you have to. Think of this as a last resort. Never use this route as an ultimatum. This will only backfire in your face if you make this choice.
It’s time to think of your clients. Treat them like people, not just another number. If you do this more often, your clients won’t feel so inclined to skip out on their payments.