How to get money out off your Customers in 12 effective ways

Get your skates on and collect those Invoices effectively

Get your skates on and collect those Invoices effectively

 

Spiraling costs, rush of new sales, getting in old debt as quickly as we can.  Getting out there and chasing for new business, ensuring that account management on existing Customers is going smoothly.  There is so much to take into contention when running your Business.

The following are just 12 major points in how with a good bit of restructuring and planning internally you can make good your bad debtors, as follows:

1) Get it right at the front end!

Generally Accounts Receivables/Credit Control/Customer Accounts are perceived as those at the back end.  Waiting for those Sales to come in and the Invoices to be chased.  Getting it right at the forefront, means that correct processes are followed through in credit checking your Customers, ensuring that your Sales Staff have the correct notes documented in any initial conversation should things turn sour at a later stage, and/or ensure that all emails are safeguarded away, as you just never know when you may need it.

By having controls in place means that you are better versed as a business or a decision maker within a business to ensure that you have the confidence in reducing your bad debt straight away.

2) Apply Credit Limits

This varies depending on what kind of Credit Limits you could be setting depending on the type of product or service that may be selling to your end user.  E.g. would you credit check a new business, maybe not as they do not have an established set of published accounts, or that route to market it doesn’t cost you anything.  Does this sound farcical, it might do but you would need to factor in a loss factor right from the beginning.  Naturally, new businesses and those who have failed to maintain some of their payments would be allocated a high risk rating, and a more sensitive credit limit, but the discretion is absolutely yours.

3) Send out Invoices promptly

Essentially as soon as you have a system in place which depicts Contracts to be loaded, then it is up to your Billing Team, and Accounts Receivables team to have the correct Invoices raised and sent out.  Without that, Customers are not likely to pay this to you.  This is obvious, but sometimes the little things could be missed.

4) Telephone Manners

Where in doubt once the Invoices are chased, many businesses will either forget, or will not deal with these matters unless they are chased, so for your Invoices to be paid in a timely manner, it only makes sense if you have a structured follow up system to get your Debtors to pay you.

5) Send letters out promptly

Like that of effective telephone chasing, Letters have an effect too as they are likely to be documented, or should be documented by your Business so that you are employing not only one type of chasing but two.

6) Send Statement of Acccounts out when requested

If a Customer feels that they have not received a good service from you, and/or feels that the payments that they have sent out to you have not allocated correctly, then it is only just that they have a Statement of Account from you showing all their payments detailing all payments made.  For Start-Up’s this is suffice on an Excel spreadsheet, but the larger you go, it is better to obtain a CRM system which does this for you automatically.  From time to time, your Accounts Person and/or Accountant may not have marked the account properly, so it is essential to bear in mind that you would need to conduct a reconciliation, and/or employ a Specialist Business Adviser or Debt Consultant to do exactly that.

7) Send Credit Notes promptly

To tie in with Point 6 raised above, it is important that if there is something amiss on the Statement of Account, or that any discrepancy is raised by your Customer, then to keep them satisfied through good Customer Service, your Accounts Department or Billings Team, or yourself if you are a small business raise Credit Notes to show the correction.

8) Quality Control

There are likely to be other instances, depending on the type of business or industry that your company/business operates in.  So it is better to have the input and/or a good system in place to follow up on any queries that may be outstanding.  By not dealing with it, will only loose your existing Customer, and many times I have found in my experience that just a simple query resolution is all it takes in getting your debts paid in little or no time.

9) Improve Communications

As with Point 6 and 9, it is important to monitor the communications with your Customers.  We cannot re-iterate enough that by treating your existing Customer base with distaste will only set to anatagonise them further.  Maybe by sending out a survey or asking them for further assistance in how you can perform better will result in their coming back to you to obtain better and repeat business.

10) Credit Control Training

Having worked in a lot off different industry sectors, it is always crucial to have the correct set of credit control processes under way.  If you feel that your staff can be better at dealing with some of these queries, then why not request a specialist to come in to discuss and find a way of assisting your current team to understand what would make it better for them to become effective Credit Controllers.

11) Sales input

Sometimes, it is better to have a departmental collaboration – so it may be imperative to have your main sales contacts to sit in with you to alleviate stress on the business not reaching its collections targets.  All Sales and Credit Control Team’s be it small or big needs to be prevalent in working together in understanding the lifeblood of the company, which is their Customers.  Sometimes, it may help to work as a Team and play a Good Cop, and Bad Cop scenario so as to overcome any issues that may arise in the future.

12) Attend to 90 day debt

In larger companies, Senior Management would meet on a regular basis to discuss the high end debt balances.  For small companies, anything that goes wrong can cause frustration.  Maybe consult an expert in dealing with these balances and what you could do in getting these paid better and more quickly then you previously thought possible.

Summary

If you need any further assistance, or could do with a free no obligation chat regarding any existing business debts that you may be experiencing, then please do not hesitate to contact the writer of this Article.

 

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RonM
 

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