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June 29, 2009
Strategies For Getting Paid On Time, Part Two
As a business owner or manager, you must manage for cash. One of the best practices for increasing cash flow is to manage your accounts receivable. This can not only help ensure your survival but also your growth. Two tactics we recently discussed were checking credit for all new clients and setting your payment terms at the time of the sale. Today, we'll discuss two additional in-house strategies you can take immediately.
Review Payment Terms:
Re-assess your payment terms for the current market conditions. It could be time to offer additional payment options, such as PayPal, debit card, or to accept additional credit cards. Consider putting new clients on tighter payment terms on a trial basis with a review to follow. You could also include a small discount for on-time payment if your margins allow for it.
Avoid Firm Tactics With Regular Customers:
Your regular, normally reliable, clients deserve different treatment in debt recovery. Perhaps they came on board years ago with a handshake and now seem like "family". Try co-operation and communication as a primary tactic rather than a heavy hand. A phone call from the director will strengthen the relationships between valued but slow paying customers and is a chance to personally explain the impact of late payments on your own cycle and survival. Be ready with options for partial payment or suitable suspension of supply or service. Be considerate but also stay firm enough to get the account settled.
As important as any other practice in debt collection is proactive and open communication between you and your customers.
To learn more about how Simons Bitzer & Associates can help you manage for cash, call 317-782-3070 and schedule a FREE one hour consultation with one of our team members.
