Maintaining a strong and decisive billing process is essential to ensuring healthy cash flow and minimizing late payments from your business customers. Some simple yet critical steps to follow:
1. Monitor when an account opens, the timeline of work being done, and when precisely to send an invoice. Terms of payment should be abundantly clear to every one of your clients before you provide anything to them.
2. Be in control from the very start. Set up clear expectations and payment standards. Present clear transaction terms before taking on any new client, and be sure to put the terms of payment in writing.
3. Include a payment schedule in your sales agreement with the client. When setting a schedule that works for you and your clients, consider industry standards as well as what your business needs to maintain steady cash flow. If, for example, you state that 30 days is a reasonable expectation, put this in the agreement as well as pay-by dates on future invoices. Consistency is vital in order to maintain the respect and trust of your business clients.
4. Establish a clearly defined process for following up on past due invoices, with a schedule of when a call will be made after payment deadline, then when you would send a letter or email, and then follow-ups, etc. If you must engage in a collections process, do so in professional and courteous way. The key is to maintain a good relationship with your client so as to avoid the process of seeking the services of a collection agency or a collections attorney.
Be prepared, disciplined and consistent in choosing your clients and in your billing process from the very start. By doing so, you will demonstrate to your customers that you are serious about your business which, in turn, will go a long way toward ensuring on-time payments and avoiding the costs of unnecessary collections.
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.