Accounts Receivable: Best Practices Fundamentals Part 4

In the previous three articles of this four-part series on Best Practices Fundamentals we examined accounts receivables management tips from three external sources. Now, in this final part of the series, let’s identify the core fundamentals that each of the sources had in common.

Credit Policies
Each of the three sources focused very intently on the importance of assessing a customer’s ability to pay (checking credit and businesses references) and extended credit accordingly, and wisely. For problem customers, consider restricting credit terms, or even withholding product delivery until all past due payments are received.

Communication and Customer Service
Contact. Know your customers. Respect. These are all words the three sources used to emphasize the necessity of maintain a good relationship and constructive rapport with your client. A client who knows they are valued will be more likely to pay on time.

Documentation and Recordkeeping
In any business, maintaining detailed transaction records is vital. With accounts receivables, keeping meticulous documentation of customer contact numbers, sales, payments, and all collections-related communications (including calls, letters, and emails) is critical to maintaining healthy cash flow.

Payment Options
Flexibility in payment options is a benefit to customers (and all customers like benefits), and therefore a benefit to you. Some recommendations by the three sources were: offer discounts for early payment; offer payment by credit card or electronic funds transfer; for customers having trouble paying, offer payment arrangements.

Collections Alternatives
It is inevitable that you will at times be unsuccessful at collecting from a non-paying customer. In such cases you can factor your invoices, take out an accounts receivable loan, or acquire the services of a collections attorney. When considering any of these options, be sure to weigh whether or not the costs of seeking such avenues are worth it in the long run.

The Jayaram Law routinely and successfully assists its clients in their business-to-business (b2b) collection needs.  We take pride in obtaining payment on accounts receivables without fracturing critical business relationships or engaging in time-consuming and costly litigation efforts.

If you need business debt collection services conducted in a professional manner, contact our B2B (business-to-business) debt collection law firm by calling 312.454.2859 or visiting