I gave you a few tips recently on managing your cash flow and I have a few more for you. We talked last time about billing on time. I can’t say it enough. Bill on time…It’s the cornerstone of a well oiled accounts receivables system. As someone who has worked at a collection agency for over 20 years, I have seen far too many times, businesses coming to seek the assistance of collection agencies only to find they have not paid attention to the basics. That and professional accounting software were my last two recommendations.
Here’s a couple more:
Make sure your customers understand your billing policy right up front. If you charge a retainer, say so. If you ask your customers or patients to pay at time of service, make sure they understand this. If you’re going to bill them and you expect them to pay within 30 days, make sure they are aware of this before you service them. If you have a lobby, post a small sign there. If you’re a small business owner such as a pest management company or lawncare company, and you visit a new client, maybe create a short letter outlining your billing policy at your first visit.
Make sure there is at least one dedicated person internally that manages your late receivables. Make sure they are not wasting any time in following up on late-paying customers or patients and script them accordingly. While there may be certain things you may or may not want to say, make sure you are creating a dialogue with your customer and try to resolve the payment issue with respect. Your goal should be to keep that customer as well as get paid.
For more tips and advice are on our YouTube channel. There are many videos there that have advice on a whole host of issues.