subject: What Is The Best Way For Your Company To Collect? [print this page] 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 and foremost, any company needs a systematic way to be sure that its invoices are paid within its trading terms. This includes a document that needs to be signed by the customer, setting out the trading terms. These include when the company will invoice, when payment must be made, and an outline of what the consequences of not paying an account by the deadline will be. Among these consequences may be an account keeping fee that is charged once an account is outstanding for a set amount of time, a hold being put on services or goods and a final deadline by which time the account will be sent to collections.
These trading conditions must be signed and held in the customer file. Additionally, there will have to be administrative systems in place to be sure 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 is efficient.
The next issue to hone in on is a debt collection system that is centered on personal contact rather than letters and statements. Experience shows us that collection is way more efficient when customers receive 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; 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 begin. As far as debt collection agencies go, an agency that works on a no collection, no fee policy is usually the best choice.
