Once you’ve established the foundation of organizing your accounting system, the next step is to establish transaction policies to ensure the system works most profitably for your business.
- Be sure your policies and procedures are in place before taking on customers.
- Once a customer comes your way, present the transaction terms. Make sure the terms are clearly spelled out and are always in writing. We recommend maintaining a practice of having each page of the sales agreement initialed by both you and your customer so as to reinforce an understanding of the terms.
- The terms should always include a payment schedule which outlines the time frame for payment, as well as penalties should payment be received past specified due dates.
- Be sure that the payment terms are consistently reflected on every invoice. Consistency helps to maintain your customer’s trust and respect.
- 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 Group 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.