Many business owners become sheepish when it comes to performing collections. Perhaps it’s because they don’t like confrontation. Or perhaps it’s because they don’t want to risk losing a customer – even a slow-paying one – by appearing to be on their backs about money. However, this kind of hesitance is bad for business. And you’re in business to make money. But if you’re not proactive in your collections efforts, then what you are in essence doing is financing your customers. And they can do a lot with the money they owe you while you wait to get paid.
Here are a few things you can do to improve your collections (and it starts with improving your perspective!):
1. Come to the critical realization that your invoices are your most valuable assets. Many companies have gone out of business or bankrupt because they allowed their invoices to go unpaid.
2. Let your accounts receivable staff know that their job is vital to the success of the company. Strengthen your policies and practices and reinvigorate your receivables staff (or, if necessary, make staff replacements) so that they operate with maximum effectiveness.
3. Be diligent and consistent in implementing your policies and procedures. Make it a rule to follow up on invoices thirty to thirty-five days after sending the invoice by making contact with the accounts payable staff of your customer. Get to know them, their names, and develop an amicable, professional rapport with them. This fosters good relations and better business.
4. Follow up on your follow up. In some cases circumstances may require more follow-up, and perhaps even the involvement of a collections attorney. But always remember that the sooner you identify issues and seek to resolve them – particularly in regards to your own receivables collections practices – the better for your business, its cash flow, and its success.
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.