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FREE Help For Creditors!
10 Practical Ways To Increase Your Cash Flow By Preventing & Collecting Past Due Accounts You work hard to make the sale, and then to deliver the goods or services in a timely and professional manner. You have a right to receive payment for your efforts in the same style. However, even if you’ve only been in business a short time, you may have already learned that prompt payment is not always the case. What can you do to minimize the past due accounts and bad debt losses? Based on years of experience working with businesses in solving their accounts receivable problems, Synergy Recovery Corp offers these ten basic steps your business can take right now.
1- Develop a Detailed Credit Approval Policy 2-
Clearly Communicate Your Payment Terms 3- Consider Offering
a “Prompt Pay”
Discount 4- Invoice Promptly and Bill Regularly 5-
Contact Past Dues More Frequently 7-
Trust Your Aging
– Not Your Feelings 8- Make Sure Your Staff is
Well-Trained 9- Admit and Correct Any of Your
Mistakes 10- When You Need Help, Hire A Professional
1-
Develop a Detailed
Credit Approval Policy Keep the odds in your favor and head off trouble before it starts by establishing criteria for offering credit and then sticking to it. Require references and check them. If dollar amounts are large enough to justify the minimal expense, run a credit check. For customers with a slow or no pay history require a deposit or payment in full, in advance or at the time of delivery, otherwise consider declining their business. TOP OF PAGE
2-
Clearly Communicate
Your
Payment Terms One cause of overdue receivables is the creditor has not clearly defined to the customers when accounts are to be paid. If customers do not understand your terms, they may be encouraged to assume that they are “Net Eventually” and pay late, if they pay at all. TOP OF PAGE
3-
Consider Offering a
“Prompt Pay” Discount A traditional and effective incentive to early payment is the 2% discount for payment within ten days. Of course you can structure whatever discount suits your business, however make sure that your customers know about the discounts. Additionally, charging a Late Payment Fee may also encourage customers to make timely payment. Again, note the late charge provision on invoices and bills so that customers will know about it. TOP OF PAGE
4-
Invoice Promptly and Bill Regularly If you don't have a systematic invoicing and billing system, get one! You'd be surprised at how many customers haven’t paid simply because they haven’t been asked. If you have to do it manually, set up a calendar "tickler file" to remind you to send out regular statements. Pick a day each month (maybe the 3rd Thursday) and send out your statements. Or hire an outsourcing service to handle this for you. If you have a computer, there are software programs that can be of enormous help. Whatever you choose, find a way to bill regularly and do it. TOP OF PAGE
5-
Contact Past Dues
More Frequently There is no law that says you can only contact your customers once a month. The old adage "A squeaky door gets oiled" has a great deal of relevance to collecting past due accounts. Special tip: Contact your late payers every 10-14 days. Doing so will greatly increase your company's cash flow. TOP OF PAGE Aside from knowing when issuing credit is appropriate, you and your staff need to have a plan to follow-up when any customer has missed a payment deadline. Determine ahead of time what action you will take and when you will take it. Create a visual "flow chart" of the steps you can take. Post it to remind you and your staff of what needs to be done when an account becomes past due. Create a schedule to send statements/letters and make follow up phone calls. Stick to it faithfully for at least 60 to 90 days. Remember, the longer an account goes unpaid, the more difficult it becomes to ever collect (see "What Your Collection Agency Won't Tell You"). If you aren't paid within that 60-90 day time frame, that’s when you need to immediately consider sending it to a professional service, such as Synergy Recovery Corp, for effective, consistent follow up. TOP OF PAGE
7-
Trust Your Aging
–
Not Your Feelings You’re not alone if you’ve let an account age beyond the point of ever being collected because you "felt" that your customer would eventually pay, but the truth is if you aren't getting you’re money, someone else likely is. That's why it's so important that you objectively stick to your plan of systematic follow-up. That will soon reveal which customers intend to pay and which don't, enabling you to take the right action at the right time to get your money. TOP OF PAGE
8-
Make Sure Your Staff is Well-Trained If you or the members of your staff have not had any special training in bad debt recovery, get some. There are specific skills involved in collecting money, as well as legal issues to consider. TOP OF PAGE
9-
Admit and Correct Any of Your Mistakes Sometimes your customers don't pay because they feel your company made a mistake. If that’s true, quickly acknowledge it and, most importantly, correct it. Customers realize mistakes can happen. However, deny an obvious error and the fire of resentment they may already feel is only fanned. The best thing you can do with a customer who is upset over a mistake, is listen to their complaint completely before making any response. Diffuse the situation by acknowledging their experience and, if appropriate, accepting responsibility. Demanding payment without giving your customer a chance to air his or her complaint will only compound the problem. Once you accept that a mistake has been made and promise to correct it, you've taken away any reason for further argument. TOP OF PAGE
10-
When You Need Help,
Hire A Professional As a third party, a professional collection service can motivate customers to pay in ways your business simply cannot. There are different types of debt collection assistance from which you can choose. Some of your options include small claims court, collection attorneys, and collection agencies. However, before going to those expensive and time consuming options, consider the services offered by Synergy Recovery Corp. No matter how much is owed or where the account is located, they likely can be recovered expertly and inexpensively. TOP OF PAGE Remember, Nobody Collects Every
Account Even by setting up and adhering to a specific collection plan, over time you will probably have a few accounts that will never pay. Identify these accounts early and take appropriate measures to terminate further transactions, and save yourself and your company a lot of time, energy, and money. Despite those few accounts, you'll find that implementing these ten steps, will greatly diminish the overall number of slow pay and no pay accounts. That's a victory in itself! If you are currently experiencing problems with slow pays, consider using the affordable services of Synergy Recovery Corp. For more information, call Synergy Recovery Corp toll-free at 800 682-7298 or email: info@synergybr.com. Now
Recover
More Past Due Accounts &
Bad Checks
With The
Synergy Cash Recovery Solution |
