subject: Guidelines To Avoid Payment Delays And Default [print this page] "Businesses won't be able to stand with the absence of payment. Your business will suffer a great deal even if you have a lot of accounts receivable but you are not getting any payments. If you are producing something, for example, you need to buy raw materials in order to resume production. Unless payments are received on time, accounts receivable won't count.
Here are tips on getting the compensation that is due for any product or rendered service.
If you have a first time customer or a new account, either you ask for a prepayment, also called down payment, or you ask the customer for a credit reference. He may know a customer of yours who has a good credit record in your business transactions. You could offer him discount or free shipping in return.
If you are brave enough to skate on thin ice, take the precaution of limiting the amount of credit that you will give them on the preliminary orders. For example, you can limit the first three orders to 100 dollars. In this way, you are still comfortable even if the customer does not pay on time and your business can still continue operations.
When the compensation doesn't arrive at the expected date, follow the standards of how to make collections. First of all, you can mail to them a letter of reminder for the first thirty days. Call courteously within the next day then do it again in the next two weeks. Don't hang up till they make a statement to commit, date that a check will be sent and how much the check is for. If the customer continues to make promises but doesn't keep then its time to hire the services of a collection agency. They would know how to twist an arm.
If your product or service was ordered by phone using a credit card, call them to verify the account number, when the credit card expires, and the total balance left on the card. It is important that the name used by the customer who ordered is the same as the name where the merchandise is to be shipped to and that the addressed being used is not a post office box number but an actual street address.
It sometimes happens that the person ordering is not the same as the one on the shipping address like when a sister orders a present for a brother. And with a post office box, anybody can just pick up the package anonymously.
