To assist you in making sure that your company maximizes collection of your accounts receivables while making sure that your company remains in good standing here are some tips that should keep you well paid, and well thought off.
- Do not be complacent
Sure your business may not be struggling now, profits are good, and expenses are down, so what if a few bills go unpaid? At least we will look generous… big mistake. Remember that when it comes to debts and write-offs, people tend to have a long memory. And when you start letting one or even two bill payments or added charges slide, they will try to get away with more down the line. While it is not advisable to be so overly strict, you should have a basis for all your dealings. This gives you an air of fairness as a company.
While generosity is well and good, it would be better to ‘share the wealth’ so to speak by offering discounts and freebies instead of writing off some bills. This keeps your dealings fair, while making you look good with your partners.
- Have a process in place
When should you send out collection letters, when should you call to collect? These are all questions that are addressed by having a process in place that will ensure that collection activities including follow-ups are done during a specific schedule. Likewise, having a process can help you avoid missed collections simply because you forgot to follow-up. Remember that the longer receivables remain unpaid, the higher the likelihood that it will remain unpaid. Having a clear process helps make sure that nothing is missed or neglected.
Being disorganized is not only detrimental to your bottom line; it is also detrimental to your good relations with your partners. Always assume that they will not remember when to pay, so you have to remind them rather than looking like a bad guy, collecting after the due date has already passed and pressuring them to pay.
- Learn to Communicate, Understand and Compromise
This is essential. Remember that more often than not, accounts receivable collection and the adherence thereof to your set guidelines on collection, should be on a case to case basis. Therefore, communicating regularly with your partners helps keep you up to date on their financial position, as well as their ability to pay.
While constant write-offs are discouraged, learning to compromise with your partners when they really cannot pay is a must. Of course by communicating effectively with them beforehand, you will no longer be surprised when they have a down turn, and it helps you make an informed decision on when you should compromise, and when you should not.
- Have the Best People On the Job
Insensitive people on your accounts receivable team will make you and your company, look bad. Thus it is important to have the best people suitable for the job to handle you’re accounts receivable collections. Otherwise, even with all your hard work and desire to be fair, it can still all go wrong simply because someone from your team said or did the wrong thing.
Relations are a volatile thing, and sometimes even the tiniest slight can ruin good relations. Therefore having the best people, whether this is through an in-house team or a trusted outsourcing team, make sure that these really are the best people who will represent you and your company.
Collections have always been a tricky business, and keeping your company on track in terms of finances should not have to compromise your good standing with your partners. Hopefully with these tips, your company can collect you’re accounts receivables effectively, while still keeping your best foot forward.
About Infinit-O
A provider of finance and accounting outsourcing solutions, Infinit-O’s Accounts Receivable services and core team of analysts can deliver efficiently and effectively the back office solutions tailored according to your company’s needs.
Infinit-O has established successful partnerships with clients who have incorporated the documentation processes our company has developed with them into their global processes.
For further inquiries, contact Infinit-O’s Strategic Solutions Director, Carlo Dionisio at 866-727-2504 ext. 809 or
Author: Audrey B.
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