Your customer is satisfied — but a month has gone by, and your invoice is still outstanding. You’d like to work with the customer in the future. So how do you get your money without losing the customer? Here are two strategies to avoid increased aging accounts receivable that may help:
1. Make it a habit to clearly and promptly communicate with your customers. On the day after the due date, send an email with your original invoice attached, or fax a copy. Then call to make sure the duplicate was received. While you’re talking, ask whether the customer has all necessary documentation and find out why payment is delayed. If the customer is happy with your performance, mention that you won’t be able to complete new contracts until past invoices are cleared up. Make sure to request payment by a specific date.
2. Be willing to negotiate with your customers. When customers fall on hard times, you may still be able to find a solution that will work for both of you. Some options include:
• Ask for a portion of the outstanding balance.
• Request that a specific invoice be paid immediately, with the remainder due at staggered intervals.
• Establish a short-term payment schedule for a series of smaller checks.
• Offer to convert the receivable into a formal note with an amortization schedule and interest rate.
Setting credit terms, limiting the amount of credit you’ll extend, checking ratings and requiring down payments can prevent collection difficulties. We help growing corporate clients establish best practices, policies, and procedures in business operations. If you are interested in professional assistance, give us a call.
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