Should you be experiencing negative changes in the payment behavior of your customers CASE can help! As a collection agency with offices in Edmonton, Calgary and the GTA we can apply our best professional efforts in order to make your past due accounts receivable a top priority.
There is an old saying in the debt recovery profession that says, “a sale is a gift until the invoice is paid.” It’s the mandate of your A/R personnel and effective third party agent to turn those gifts into sales. From our perspective, not only are companies not paying their invoices on time, there is a growing trend toward paying them later and later. Thus, the need for good collection professionals both in-house and third party with effective skills is stronger than ever.
Below are a number of general tips and techniques to consider in your efforts to keep your customers current and to reduce your overall DSO (days sales outstanding):
Anticipate, wherever possible, the customer’s needs.
Become the squeaky wheel who gets paid first.
Begin follow-up efforts earlier.
Build a strong relationship with your customer’s accounts payable manager.
Communicate immediately with a past-due customer via an invoice copy and computer generated message. Follow this up with a phone call.
Educate your customers. Make sure they know what your payment terms are and when you expect to be paid.
Establish consistency in customer contacts. This means that credit, customer service, and sales must tell the customer the same thing when it comes to payment terms.
Focus on largest accounts and get them to pay close to terms without letting the smaller accounts get completely out of hand.
Follow-up, follow-up, follow-up. Use frequent and persistent phone calls to follow up on late payments.
Have a well-documented sales agreement defining payment expectations.
Have invoices printed and mailed promptly. Some companies take a week or more to get invoices in the mail, and their customers start the clock running when the invoice hits their desks; not on the invoice date.
Identify recurring problems with a particular customer and get involved in resolving the problem.
If your A/R staff run into the same problem with different customers, review your own internal procedures to see if you can fix the problem.
Make sure that your invoices are correct the first time they are printed. With accurate data, your customer will not have to waste valuable time trying to correct the invoice.
Notify both the customer and the salesperson the minute an account is put on credit hold.
Personal contact in a non-offensive manner works best. Friendly reminders keep the communication channels open.
Resolve all disputed issues before the due date of the invoices.
Set deadlines and then communicate those deadlines both to those involved internally and to the customer.
Treat all people with respect. Your customers do not look forward to collection calls.
Use technology, specifically faxes and email, to reach delinquent customers.
With new accounts, especially if significant amounts are involved, make it clear that prompt payment is expected. If the customer is slow, tactfully jump all over it.
From Patrick (Pat) Riley, 5 time NBA Championship winning head coach:
“Great effort springs naturally from great attitude.”