If you are not proactive in collecting your receivables from slow-paying or no-paying customers, then what you are in essence doing is financing them. And they can do a lot with the money they owe you while you wait to get paid.
So how can you improve your receivables collections? It must start with a change of perspective and approach. Here are some critical steps you should consider in putting change into profitable action:
1. Recognize that your invoices, and accompanying proofs of performance, are your most valuable assets. Many companies have gone out of business or bankrupt because they allowed their invoices to go unpaid.
2. Reinvigorate your accounts receivable staff by clearly emphasizing the fact that their job is crucial to the viability of the company. Assess the staff’s efficiency and then put in place new policies and practices that make your receivables staff operate with maximum effectiveness. This may require retraining yourself, and then retraining your staff. In some circumstances it may require replacing your staff.
3. Implement your new receivables procedures with determined resolve and consistent diligence. Again, know and respect the value of your invoices. Don’t send them out as if they were mere chain letters, complacently waiting on the response of your customers. 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 not only good relations, but better business.
4. Follow up on your follow up.
In some cases circumstances may require more follow-up, and perhaps even the involvement of an 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.