Every business wants to get paid faster.
In fact, a business or medical practice NEEDS to get paid sooner. Late payments can do all types of damage to a business. It hurts cash flow, delays your own payments on bills, and costs you money in the long run. Late-paying customers can create untold amounts of stress on a business and can even cause those consumers to go elsewhere because they have not paid you. Embarrassed and unwilling to come to the table, they go find another provider.
Over time, late and non-paying customers can take their toll on a business. So it is imperative your operation gets a firm grip on your receivables and has effective strategies in place to help you get cash in the door quicker and a plan for those that do not pay.
Want your business to get paid quicker? Here are a few tips from our experts.
Always invoice on time
We have seen this with small businesses, and we have noticed it with some larger operations. And that is the bad habit of not invoicing at regular intervals. We find this more common in some of the seasonal businesses we serve here. Those can include landscaping and lawn care companies that get very busy at certain times of the year. It gets so busy, many of these organizations fail to schedule the time to invoice. But not invoicing on time can cause damage to your business for several months to come. The domino effect can take a long time to recover from.
We have advised this on many occasions and with many of the organizations we work with. Put invoicing in the company schedule and avoid altering that time at all costs.
Your customers actually expect a prompt invoice for service. The last thing your customer wants or needs is a bill for six months of lawncare all at once. And you should not do business that way because it will not get paid. And when it comes time to collect, it will make it much more difficult to get paid.
Invoicing on time and at regular intervals will save your business.
Listen to your customers
One of the best ways to resolve a dispute over an unpaid bill with your customer is to listen. Demanding payment without listening to their side of the story will in many cases, get you nowhere and only delay getting any type of payment in the door. If your customer has challenges in meeting their financial obligation to your business, you need to hear what they have to say. It’s not only the right thing to do, but it can help you resolve the matter much more quickly.
Your customer may be facing financial hardship, they may have an issue with the service you provided, they might need just a little more time to make a payment, or they are confused and do not know where to turn for help. Listening can help you resolve these issues for your customer.
Bottom line-don’t just try to get off the phone quickly with your customer. Hear what they have to say and help them resolve the issue.
Hiring the right collection agency
It used to be that hiring debt collectors was a last resort for a business. Not anymore. The right agency should be a partner in your overall accounts receivable program. We have always said that if you are running a business, you will have a certain percentage of customers who will pay late or not pay for various reasons. Because chasing down these customers can be time-consuming, hiring an agency that aligns with your business goals can be a smart investment.
If you are running a business with a regular need for assistance in getting customers to pay, it is a wise move to have a collection agency as part of your program.
Implementing a collection system with the right partner can enhance your overall receivables program and get you paid faster.
While your customers may not be able to pay off the entire amount in some cases, they can be placed on a payment plan. Your professional collector can help set that up. And because of that, you will get paid faster.
Does your business need a program in place to get paid faster? Contact our team today!