The Science of Bill Collecting

By March 2, 2017Articles

Making Your Bill Collecting Less Difficult

 
Like it or not, some customers always lag in their payments. It hurts your company’s cash flow and causes frustration for both your accounts receivable personnel and the customers.
 

Tips on Effective Bill Collection

But you can get your receivables in better shape and keep them there if you put your staff on this regular exercise routine:

  • Be accommodating

    Talk directly with the person who signs the checks and calls him or her by name. Present your company as friendly, understanding and personable. Let the customer talk and explain why the payment is late. There may be extreme circumstances that you can help resolve. Get through sob stories to the truth so you can figure out your options.

  • Create an action plan

    Get a payment agreement before the conversation ends. Any payment beats no payment. It shows the customer is trying and it keeps communication open. You may need to alter payment terms to match the customer’s cash flow or make the payments smaller over a longer period. Repeat the agreement to the customer and follow up in writing. This helps ensure that both parties understand the deal and it creates a paper trail that has a powerful effect on the customer’s commitment.

  • Maintain contact

    Balance the extent of your efforts against your relationship with the customer and what’s worked before, but use every means possible to maintain contact. This includes mail, e-mail, telephone, fax, and personal visits. Send notices early so the client has a full business week to pay you. If you offer discounts, encourage customers to save money by taking advantage of them.

  • Keep it simple

    Make sure invoices are sent out on time and clearly show the amount owed and what it is for. Otherwise, customers may throw the invoices into the stack of paperwork to do later. When they finally get around to paying, they may spend their time – and yours – calling to ask for an explanation of the charges.

  • Work together

    If customers need more itemisation, try to customize the bills as much as possible without sparking a rebellion in your billing department. Avoid jargon. Use only clear language that needs no interpretation and is difficult to misunderstand.

If you take your time, understand customers’ needs and try to help them you will get your money faster whilst strengthening relationships with your clientele. End result: A healthier bottom line.

Article Supplied by: Thomson Reuters
Brought to you by: Advivo Accountants and Advisors

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