How to get Customers to Pay Invoices

2 11 2010

In an economic recession, it is especially important to collect money owed to your company for your products or services. Several companies who were unable to get their customers to pay went out of business.  You do not want this to be you.  Setting up a plan in case clients do not pay is a good idea. Here are some tips to get customers to pay what is owed to you.

  • First, keep the value of time in mind.  Create a new billing policy and let customers know about what changes will occur and when they will take place. Let your customers know why you are changing collection policies; they will be more understanding if they are aware of policy changes before they take place.
  • Second, remember that money collected will add cash flow to your company.  If customers do not pay, over time it may become completely uncollectible, resulting in a loss.
  • Third, assemble a team with legal, accounting, and public relations personnel to device a billing policy.  If you do not want to organize a team within your company and become stricter about collections yourself, consider using a Third Party Collection Agency.

If you decide to use a Collection Agency, Butler, Robbins & White is here for you.  You should always do your research and make sure the company can fulfill your needs.

It is also important to decide to use an agency sooner rather than later.  As soon as an account is overdue, you should initiate your collection plan, or quickly decide to use a corporate collection agency. Most companies call an agency once a debt is between 60 and 90 days past due. Remember the longer you wait to recover unpaid receivables, the less chance you have of putting money owed to you back into your bank account, and corporate collection agencies work on contingency, so there is no out of pocket costs up front.

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