Every business owner will experience problems getting customers to pay up on their past due accounts at some point in their career. However, when too many pay too slowly or don’t pay at all, cash flow starts to become a real issue, which means business growth becomes virtually impossible.
In the worst situations, slow paying customers can make it difficult to pay the monthly bills, including the rent and utility bills. Some business owners even have trouble making payroll because of customer debt.
The first line of defense for keeping customer debt at a minimum is to make sure your clients understand the terms of their creidt. Make sure your clients know what their responsibilities are from the very beginning. Keeping your clients informed of various fees that can bump up their balance is also a good way to keep surprises from derailing trust and delaying payments.
Billing is another area where business owners have weaknesses that lead to cash flow issues. For instance, if you’re not sending out billing invoices promptly, you can expect late payments. Don’t let your invoice envelopes be mistaken for junk mail – one way around this is to have an “invoice notice” stamped on the front of each envelope used for billing. If you haven’t received payment within 10 days, send out another notice.
At some point, you have to decide when you’ll make a call to the late-paying accountholder. If multiple reminders produce no payments, having a person in the accounts receivable department put in a call with the accountholder is a good step to take. This step also reveals reasons as to why the client can’t make a full payment. The best course of action is to work out a payment plan that better suits the individual. Besides, some payment is better than no payment.
Going after late payers is a touchy subject for many business owners. Some face a decision of going to court with a client who doesn’t pay up. Others are ill equipped to make the appropriate communications with clients who pay late and wind up with a complaint against them for their debt collection practices. This is why the smarter choice is to go with a third party that knows the collection industry inside and out and can effectively collect on customer debt.
A professional debt collection company has more hardware and software as well as training to find accountholders who suddenly disappear. They also know how to communicate with them and can work out a payment plan that keeps you flush in cash and able to plan a more consistent strategy for business growth.
Omega-RMS, llc., has the business solutions you’re looking for when it comes to collecting on debt. As part of the Association of Credit and Collection Professionals, Omega has proven itself a valuable asset to businesses in several industries that rely on our strengths. Education, medical, consumer products and memberships are some of the industries in which we’ve had success.