Great Accounts Receivable Innovations

"When your customers don't pay their bills on time so that you yourself can pay your

own bills is one of the most annoying thing about being an independent contractor. However, this is normal in business operations, it happens all the time. So it should be noted that this is nothing personal. Let us discuss some points to consider so that your clients are compelled to pay on time.

You can give them a little nudge like a motivation with a discount strategy. Once they pay arlier they get a discount of, say, 2 percent. This surely works very well on everyone. Utility companies use this strategy and we always pay our bills on time. It is guaranteed to effect behavior change from your slow-paying customers. If you have a big fish client who always pays late for, say, six months, then you can raise their bill by adding the amount of six months worth of interest. If they pay earlier you can carry over the excess to their next bill.

If possible ask to be paid in advance. After all, rendering a service should entail motivation. Therefore, some clients wouldn't object to paying cash in advance so that they are ensured that you will do a good job. However you have to know that there are drawbacks to this, one of which is you are going to be carrying a lot of cash in your person. This would be a problem if your service was carried out overseas. You would have a hard time explaining to customs that you are not a drug dealer or a counterfeiter.

One more drawback is banks don't take lightly if you deposited a large sum of money (unless, of course, if you have a Swiss account). Customers would be asking a lot of questions about where it came from.

There's another accounts receivable circumstance that may sound too good to be true but nevertheless can create some repercussions later. At times, some mistake happens in the Accounts Payable Department and they pay for the same job twice.

You would always provide them the best possible service if you value your clients enough. If you value the integrity of your own business, honesty is always the best policy. When attempting to return the second check, you might be making them look bad by pointing out a mistake. You'd be placed in a tight spot if they would insist that they made no such mistake. You have a choice to just take the check. However, problems set in if they find the mistake in their records? They would be thinking that you were dishonest. What you can do is to deduct the check's amount from their next bill and call it a rebate.

by: Greg Pierce.

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