What makes a business run, you might be asking? The answer is simple. Cash. And when the financial going gets tough, businesses without invoicing and any system to collect debt tend to feel the heat. It is a simple fact that any business that gives credit to its customers should send them a bill as soon as it is possible and have ways to ensure that accounts are collected in a timely fashion.
First of all, any business requires a systematic way to make sure that its invoices are paid within its trading terms. This includes a document that needs to be signed by the client, setting out the trading terms. These terms include when the company will invoice, when payment should be made, and what the consequences of not paying an account by the deadline will be. Among these consequences might be an account keeping fee that is charged once an account has gone upaid for a set period of time, a hold being put on goods or services and a final deadline by which time the account will be sent out to collections.
These trading terms should be signed and kept in the customer file. There also must be administrative systems in place to ensure that the company's invoices are sent out according to its policy. Business owners should never let fear of losing a customer get in the way of having a debt collection policy that works well for them.
The next thing to think about is a debt collection system that is focused on personal contact rather than statements and letters. Experience demonstrates that collection is more successful when clients get phone calls instead of threatening letters. The first step is a telephone call to customers who haven't paid their bill within the terms that they agreed to. The phone call should be scripted and timely. This should be done within a few weeks of the account becoming overdue. From the beginning, the person making the call has to establish that there was nothing wrong with the services or goods that were supplied.
If there was, it should be addressed right away and a new payment date should be agreed upon. If the bill is still not paid by the next deadline, make another call letting the customer know that the account keeping fee will be charged, and that if the account goes past the next deadlines, supply will end and collections will start. As far as bill collection companies go, an agency that works on a no collection, no fee policy is usually the best choice that will yield the best results.
First of all, any business requires a systematic way to make sure that its invoices are paid within its trading terms. This includes a document that needs to be signed by the client, setting out the trading terms. These terms include when the company will invoice, when payment should be made, and what the consequences of not paying an account by the deadline will be. Among these consequences might be an account keeping fee that is charged once an account has gone upaid for a set period of time, a hold being put on goods or services and a final deadline by which time the account will be sent out to collections.
These trading terms should be signed and kept in the customer file. There also must be administrative systems in place to ensure that the company's invoices are sent out according to its policy. Business owners should never let fear of losing a customer get in the way of having a debt collection policy that works well for them.
The next thing to think about is a debt collection system that is focused on personal contact rather than statements and letters. Experience demonstrates that collection is more successful when clients get phone calls instead of threatening letters. The first step is a telephone call to customers who haven't paid their bill within the terms that they agreed to. The phone call should be scripted and timely. This should be done within a few weeks of the account becoming overdue. From the beginning, the person making the call has to establish that there was nothing wrong with the services or goods that were supplied.
If there was, it should be addressed right away and a new payment date should be agreed upon. If the bill is still not paid by the next deadline, make another call letting the customer know that the account keeping fee will be charged, and that if the account goes past the next deadlines, supply will end and collections will start. As far as bill collection companies go, an agency that works on a no collection, no fee policy is usually the best choice that will yield the best results.
