Overdue accounts receivables can become a headache to you and your business. Overdue invoices can negatively affect your business. It’s not just about your bottom line. If you’re looking to obtain a business loan, lenders will consider the past due accounts that you have as part of your books. Maintaining a relationship with a client is valuable, but getting them to pay their bill on time is essential. You can help to prevent overdue accounts by implementing consistent processes, working with your staff to regularly review data, and following these 5 strategies can help you and your business grow.
Strategy #1 - Offer a Payment Agreement on Overdue Accounts
Payment agreements are simple contracts made between your business and the past due client. It outlines the terms of billing and repayment. It gives your client a visual of what you expect in return for your services. It also serves to protect you if your client fails to hold to the terms of your agreement.
If you have past due clients, it’s not too late to offer a payment agreement. Usually, past due clients are simply overwhelmed and can’t pay their entire balance. Providing a payment agreement after an account is past due solidifies your relationship with the client because it shows you care about their problems. It also helps you get paid.
Strategy #2 – Tracking Your Accounts on a Regular Basis
Keeping accurate records allows your staff to stay on top of accounts due. It also allows them to know of any special arrangements made in regards to how your client agreed to pay their bill. Keeping a record of any contact your employees have with clients regarding their account is important. If your client is dealing with a hardship, notation allows you to communicate that with staff and any collection services you use.
Tracking also provides another benefit. You can also see patterns in your clients and their payment behavior. You can use this information to extend courtesy notices, provide more payment options, and track other client trends such as which services of yours they most use (for marketing purposes).
Strategy #3 - Easy Payment Options
Offering a variety of payment plans and accepted forms of payment will help ensure your client pays what is owed. Many clients prefer to use credit or debit cards, PayPal, or pay online in another way. Evaluate the best options for your business to offer options to your clients. There are many ways that you can integrate more payment options into your business. The trick is assessing your needs and implementing the right solution.
Strategy #4 – Use Deadlines
Nothing makes it harder to collect on an account due than when your office drops the ball on billing it on time. Being consistent in when you bill will help your business to stick to your previous payment agreement. Clients expect bills to come in a timely manner so that they can budget how to pay off what is owed. A typical period of billing is 30, 60, and 90 days – this allows you to know when it is time to turn the account over to collections. Many times, businesses offer a discount if a client pays off their balance early.
Strategy #5 – Find an Effective Billing Approach
Find an effective billing approach that works for you and your client. Installments, deposits, or monthly payment plans are a few options you can offer your client. Billing on a case-to-case basis can become overwhelming. Choose a method, adapt it, and be consistent in how you bill. Want to help your clients pay for your services in full? Check out Clients ARM free tool: Hello Finance Manager. It can help your clients get a loan to pay you in full.
Expert Assistance to Help Your Business
If you or your business is experiencing the stress, over exertion of resources, or negative effects caused by past due accounts, you qualify for a free process review. Find out how your business can get expert assistance to help you with your first party collections. Clients ARM account managers have a minimum of 15 years of experience. We know the law and know how to help you get the money you are owed.
