Getting Paid Before It’s Too Late

With the economy in a downturn, many companies are seeking ways to collect on Accounts Receivables. From “slow pay” to “no pay,” there’s no doubt that many companies are having a hard time collecting the money that’s due to them. But what can you do to improve the situation?

Recognize the Problem
The first step is to keep a close eye on your receivables, and take notice of any signs of potential problems. Common “red flags” include:

• Loss of Contact – They’re never in, don’t return calls, or don’t answer their phones. • Broken Promises – After the second broken promise to pay, it’s time to take action. • Change in Payment Pattern – A customer that used to pay in 30 days now pays in 90 days or not at all. • Stalling – Keep in mind that genuine complaints are usually prompt and detailed. • Bounced Checks – Never a good sign.

Take Action
Once you recognize the problem it’s time to do something about it. Focus on your company’s cash flow, not the customer’s debt.

• Avoid Making Unrealistic Demands – Insisting that you “want it all now” may make the customer avoid you. If they had the cash, they would have paid the invoice. • Suggest Monthly Payments – Ask how much they can commit to paying. If possible, get the payback schedule in writing. • Offer Credit Card Payments – You can obtain credit card processing services for a low set up fee and a percent of the transaction. It may be worth a 2 to 3% transaction fee to receive payment on a delinquent invoice.

Always remember, even when things are looking bleak, it never pays to alienate your customers. Acknowledge that they’re having a hard time and try to work out a win/win solution for everyone. If you do, it keeps open the possibility that the customer will come back in better times.

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