B2B Collections Core Essentials Part 2: Establishing Accounts Receivable Policies

With your basic foundation set with a structured and well organized accounts receivable system, now it’s time to make sure you have strong accounts receivable policies with clearly defined transaction terms. The key to this is adhering to your policies consistently.

Good organization requires that you have your policies and procedures in place before taking on any new customers. When a prospective new customer comes your way, present the transaction terms, ensuring they are clearly spelled out and always in writing.

The terms of every sales agreement should always include a payment schedule that outlines the time frame for payment, as well as penalties should payments be received past specified due dates. A penalty might be, for example, a certain amount of interest added to the amount due upon payment. Be sure that the payment terms are consistently reflected on every invoice. Consistency helps to maintain your customer’s trust and respect.

The amount of credit you offer a client reflects how much risk you’re willing to take. Therefore be sure to establish clear credit management policies. This must include a procedure for checking a customer’s credit worthiness. One policy might be to require new customers to pay up front or on delivery. When you do offer credit, keep the limit low initially and monitor the payment history over a period of time (perhaps six months, or a year). As your customer makes regular purchases and consistently pays on time, then increase the credit limit gradually.

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.