The general theme of our past three articles has been “proactivity” in performing collections. In this article we’ll wrap up this theme by presenting a few questions you should ask yourself when encountering cash flow issues and/or customers who are past due on their invoices
If you’re experiencing cash flow issues, here are the two most important questions you should ask yourself:
- What’s the average age of my accounts receivables?
- Am I billing my customers consistently and in a timely fashion?
If you have late-paying customers then you might want to consider reassessing their value to your business. If you’re holding on to such customers out of fear that late payment is better than no payment, then you need to realize that your fears will only be realized if you have no plan to replace the revenue. If you believe there are no more customers to be found, then it’s probably because your time has been eaten up with your late-paying customers, therefore leaving you little to no time to find new ones.
If you have some problem customers, keep them in mind while you ask yourself these following questions:
- Do I encourage on-time payment by enforcing late fees, or do I let it go because of the discomfort of confrontation?
- Am I sending out invoices and statements on time, along with reminders and follow-up calls?
- Do I still provide a product or service to this customer even if they have an outstanding balance?
- If the customer can’t pay on time, do I ask for at least a portion of the balance due?
In case you didn’t notice, the checklist focuses on you, not the customer. Your proactivity is key.
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 www.jayaramlaw.com.