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Top 7 Ways to Collect Past Due Accounts Receivable

By Greg Beverly

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If you are tired of having to wait on others to pay you before you can pay your own bills, you need a strategy and comprehensive collection procedure. This includes templates and scripts for every step along the way. Here are 7 ways to reduce or eliminate your over 30 day past dues.

  1. You need to make sure that you take on as few new problem accounts as you can. This is the best place to reduce your future past dues. You need to develop an approval process. Let's face it. When you extend credit to a customer, you are acting as their bank. Could you simply walk into a bank and get a loan without qualifying? Certainly not. Why would you be any different?

  2. Do not delay! You should have built into your process no more than 2 business days grace period before you make your intitial contact. This not only gives you the best chance of collecting in a timely manner, it also lets your customer know that you are on top of things, which is very important.

  3. Make the first contact verbally. Often a friendly reminder is all it takes to get your payment. Extensive testing and measuring has shown that a majority of past dues will pay after the first contact if it is made in a timely basis.

  4. Have a template for your written communication. You should use the same communication for your past dues changing only the name, dates and circumstances involved. This not only insure consistency, but also saves tons of time.

  5. Have a script for each of your verbal communications. Again, this not only insures consistency in case there is ever a question regarding the contents of the conversation, but once you get the hang of the script, you will be much more comfortable with the call.

  6. Document, document, document. Make sure that you keep detailed records regarding any contact you have with your customers. It is important that any additional contact be started with the agreements made in a previous contact. Unfortunately, you would not be making this contact if the previous agreement had been met. Again, you are reinforcing that your customer has broken the previous agreement and you are also very boldly telling your customer that you are on top of the situation and will be until the bill is paid.

  7. Always be firm, fair and friendly. Never treat your past due customers rudely or unfairly, but at the same time you must remain firm. Most are making an honest effort to pay, but may be having problems. This is another great reason to have scripts and templates. It will insure that each customer receives fair treatment.

Greg Beverly, CPA, MBA has over 21 years helping small businesses improve profits and cash flow. He has helped thousands of small businesses achieve higher levels of growth and success. You can learn how to improve your cash flow and receivable collections by visiting [http://www.accountsreceivable.yougethelp.com]

Source: https://Top7Business.com/?expert=Greg_Beverly

Article Submitted On: July 17, 2007