3 Tips To Get Your Accounts Receivables Paid Faster
Do you have a long list of overdue invoices? Those unpaid bills represent real money and lost cash flow for your business. If the unpaid amount is substantial, it could be threatening your growth potential or even your ability to stay in business. Of course, it would be nice to get paid upfront for all products and services. However, in some industries, that simply isn't an option.
Fortunately, there are steps you can take to get payment. With a disciplined, focused collection effort, you can drive payments and generate much-needed cash flow for you company. Below are a few tips to help you manage your account receivables and get money in the door.
Follow up consistently. The best way to get payment from a delinquent customer is to stay top-of-mind with them. If your customer hasn't paid, it's probably a sign that they are struggling financially. They may have a stack of bills and invoices and are trying to decide which ones to pay. You can make sure yours is on the top of that stack by reaching out consistently.
Develop a follow-up schedule and stick to it consistently. Your first call should be as soon as the payment is one day late. Then make regular calls as needed until the debt is paid. On each call, try to get at least some portion of the money or at least a commitment of when it will be paid. If they aren't hearing from your regularly, they may believe the debt isn't urgent.
Offer flexible ways to pay. If you want to get the invoice paid quickly, make it easy for your customer to pay. It would be great if they would make the payment in full, but that may not be feasible if they don't have the money. Instead, offer other options. Consider a discounted amount to take care of the entire balance. Or offer to break it up into multiple payments over time if they'll provide a credit card and schedule the payments. You could even offer financing and let them pay the amount plus interest over a 12-month period. Be creative and do anything you can to get money in the door.
Get payment upfront. The best way to avoid future unpaid receivables is to not create a receivable in the first place. Even if upfront payment isn't traditional in your industry, that doesn't mean you can't try. Consider offering favorable pricing or terms for anyone willing to pay some or all of the cost upfront. Even if you have to accept less money, that could be better than the risk of having an unpaid receivable on your balance sheet. Look at your costs and margins, and see what kind of discount you could offer to motivate people to pay upfront.
Ready to collect on those receivables? You may want to contact an account receivables management service. They can help you implement a collection program and get cash flow in the door.