If you have clients with long overdue payments and haven’t outsourced receivable management services, you should understand that you are bound to have conflicts with the client at some point of time, especially if the client continues to put off making payments. You need your client to clear the payments, which is why it is prudent to avoid conflicts. Here are some tips to help you avoid conflicts.
- Stay Calm– No matter what, it is important that you stay calm and talk in a confident, moderate and non- threatening tone. Your client shouldn’t feel belittled or attacked.
- Keep Your Emotions in Check– If your client raises his voice, you responding in kind will not help your cause. In fact, all it will do is agitate your client further and escalate the situation. Instead keep your emotions in check and respond rationally.
- State the Facts– The facts are in your favour, which is why you should state the facts and deliver proofs to your client. State the consequences and what action you intend to take if payment goes unpaid longer. Once the facts are out, discuss repayment. This makes your client aware of what the consequences will be, allowing him to process things.
- Give your Client Time to Think Through– It goes without saying that any call concerning unpaid dues never goes well. Your client is bound to get defensive and be rude. Be prepared for this and once you have gotten off the phone, remember that you need to give your client time to think through whatever was said and cool down. Once you have given your client a couple of days to cool down, call back and start over.
Collecting overdue payments is no easy task. What you need to remember is that you need the money. If the collection efforts are taking too much of your time and effort, you should consider investing in receivable management services. Receivable management services professionals know how to handle delinquent payments and even avoid them altogether, making your life infinitely easier.
Nobody ever said receivable management services is or ever would be easy; in fact it is annoying and frustrating. You make the calls, you send out the emails, but your mails and calls are as persistently ignored as your attempts to contact them. If you think you have had it and are on the verge of throwing in the towel, don’t give up yet; not all is lost and you can still get the money. All you have to do is find a point to focus on; curious? Now let’s talk specifics.
- Find a Point of Contact– “But I do have a point of contact”, you might say. True, but are you in contact with the person who can get you paid? Sometimes calls and emails are not answered because the person it is addressed to has nothing to do with it. You may be talking to the person in charge of inventory, when maybe you should be talking to the inventory manager or someone in accounts. Your chances of getting paid become higher once you contact the right person.
- Get Your Message Across Politely and Regularly– Of course you are mad because you have been trying to contact them for weeks and you don’t appreciate their attitude, but you need the clients to make the payment. So when you make the call to the person in charge, make sure you are polite and keep your message short and to the point. Frequent reminders are important in receivable management services, so make your calls at regular intervals.
- Cultivate a Relationship– Building a connection with your point of contact can go a long way in turning things in your favour. Greet your contact warmly, make small talk, talk respectfully and calmly no matter what the circumstances and soon you will have an ally. Together you can make things work. Whether it is receivable management services, business or life, having the right connections and nurturing them is important.
Confused? Well, CRM is simply Customer Relationship Management; so why is Customer Relationship Management important for receivable management? Because whether you get paid or not is greatly influenced by the relationship you share with your clients.
- Retaining Clients– Here is a simple fact- it is more expensive to acquire new clients than it is to retain old clients; which is why it is important that your receivable management efforts don’t adversely affect client relations. There may be many reasons for a non- payment- your client could have simply forgotten, or might be going through a rough patch and there are those who just don’t pay. Now the last type of client you don’t need to keep around, but the rest, well, they deserve a chance and have to be handled with care. So whether you take care of AR yourself or use receivable management services, remember that CRM is crucial.
- Improve Chances of Being Paid– If you treat your client with respect, they will want to continue doing business with you and will make sure that payments reach you on time. This will help to ensure that nothing falls through the cracks and that you get paid on time.
- Keeping Up-to-date and Accurate Information on Customers– Maintain cordial relations with clients and ensure that you have accurate and up-to-date information on your clients. If you use receivable management services, make sure they have correct details. Make it a point to know your point of contact by name and have good relations with them so that payment due calls are easier and not ignored.
Receivable Management services are never easy; it is strenuous and as a business owner you have a lot riding on it. But if you remember that customer relationship management is the key to getting the whole thing sorted, it will do you a lot of good. Besides no one ever said that running a business would be easy, but it is not impossible.
According to the networking site AngelList, in Silicon Valley alone, there are more than 23,000 start-ups; that is truly an impressive number. There is, of course, speculation and studies that indicate that the US market is facing a start-up slump for numerous reasons. Slump or not, every year sees a large number of start-ups emerging and these businesses pick up at an alarming rate. Sales pick up, more employees, tax demands increase- all in all, life isn’t as easy as it was when the start-up was founded.
As the founder of a flourishing start-up, one day you realise that you have a cash flow crisis. You have numerous overdue accounts receivable payments and with how things are going at work, you don’t have the time to contact defaulting customers and pursue pending payments. What do you do? Here are your options.
- Build an In-house Receivable Management Team– An in- house receivable management services team has its benefits. The team will be specifically trained to handle your business’ issues and needs. Such a team will also have the benefit of building and maintaining a good rapport with regular clients and customers. However, aside from having to take on the burden of hiring the whole team, you will also have to train them and keep an eye on them to ensure they are on the right track. Another issue is that as your business grows you might have to increase the size of your receivable management services team. If that seems like too much of work, there is a second option.
- Outsource to Receivable Management Services Companies– While there is a lot of controversy surrounding the topic of outsourcing, it is, without doubt, the best option for companies that don’t have the time or resources to build specific non- core business teams. Once you sign the contract, managing accounts receivables is no longer your headache; the receivable management services company will take care of it all. Their expertise in the field will allow them to negotiate with difficult customers and collect timely payments effectively. You will also have access to a larger team should the need arise.
Accounts receivable management is a thorn in the side for most start-ups. The bigger your company becomes, the more of a problem it is. If not dealt with quickly, receivable management can take down your company, so take action now.
Do you have an Accounts Receivable management problem? If you are not sure of the answer, chances are that you are having one or will most likely have one soon. Better safe than sorry; so here are some questions to ask yourself to clear things up.
- How is your day sales outstanding faring?
If you have longstanding day sales outstanding, you are headed for trouble. Outstanding dues are never a good thing and the longer you go without collecting them, the greater the risk of losing the payment altogether. It also means you are never able to plan for your business’ future. Numerous businesses have had to shut down due to poor AR management, so be wise. Invest in good receivable management services and save your business.
- Do you know who owes you how much?
If you don’t have records of payments due to you and don’t send out invoices on time, you are heading for trouble. Always stay on top of your Accounts Receivable. If you have customers who are habitual defaulters, you should take a call about them immediately; frequent payment defaulting does not signal a healthy business arrangement.
- Do you have proper records of contracts, agreements, invoices and other payment related documents?
When it comes to something as crucial as payments due, you cannot take any chances. Maintain all your records well because you never know when you are going to need it; this also includes the follow up emails you send your customers. Communication is key in business.
- Do you regularly use the services of a collection agency?
If you have to send invoices to collection agencies, well, you do seem to be having an AR problem. Receivable management services can make things easier for you, by helping you set up an efficient AR management system.
- Are all your invoices for payments over 90 days overdue?
The answer to this question speaks for itself; you definitely have an AR management problem.
AR management is a crucial part of any business; it can determine whether your business rises or falls. If you think your business is facing an AR crisis, you should turn things around immediately or else, you could invest in receivable management services. They will clean up your records and set up a reliable AR management system for you.
Accounts Receivable is vital to managing and keeping your business afloat, but it is also quite a difficult task as you rely on your customers to make accurate and timely payments. Besides, most often than not you depend on these payments to clear your payments. So what can you do to make sure you get your payments? Here are some tips from reputed receivable management services providers for increasing collections from receivables.
- Effective Communication– Effective communication is an important aspect of any business. Make sure you have a good rapport with your customers and communicate regularly with them. All invoices should be clear, concise and sent out on time. Any clarifications from the customers must also be addressed immediately.
- Clarity– It is your responsibility to be clear with your clients from the beginning and set expectations so that no one is disappointed eventually. Make sure invoices carry all the necessary information and the due date is mentioned clearly. You should also explain consequences for delayed payments to your clients to avoid future problems.
- Confidence– Collecting money from individuals for any reason is never an easy task, which is why it is important that the person with the duty of collecting the money be confident and sure of himself. Now how can anyone be confident if they don’t possess the necessary knowledge? So make sure you have all the pertinent information.
- Good Customer Service– A happy customer pays on time and accurately, which is why customer service is important. If you offer good customer support, your customer will want to maintain the relationship and use your service in the future as well.
- Facilitate Easy Payments– No one likes long and annoying payments, so try to keep the process as smooth and simple as possible. This also increases the probability of customers returning for your service as their last contact will be a pleasant one and thus, the memory that stays in the forefront.
Collecting AR is annoying, painstaking and time consuming. If you want to concentrate on your business, it would be wise to invest in Receivable Management Services for increasing collections from receivables. They are more effective and lesser trouble.
We live in the internet era- an age when nearly everything is or can be done online. In fact whether you offer online services or not plays a major role in getting you customers and more importantly in retaining customers. This is especially true for payments; people prefer it if you offer online payment options as it is convenient and much quicker. Besides the traditional payment options are slowly becoming obsolete. There is also the added benefit that it will make your life also infinitely easier, receiving payments- wise. So if you aren’t there already, here is what receivable management services gurus suggest you do.
- Accept Credit and Debit Card Payments Online– This is, of course, assuming that you have a website. If you do, look into getting a payment gateway added on your website so that you can process online payments. If you don’t have a website, need I say more, get yourself a website. You need online presence for your business to grow.
- Facilities for Autopay– Autopay is an option that deducts a fixed amount from previously fixed accounts on a regular basis. This comes in handy when you have customers who have a subscription with you or have you on a retainer. Receivable management services gurus say that this ensures that you get paid on time and your customer doesn’t have to remember or take the trouble to send you payments every month.
- Email Invoices– Save paper. Go green! Besides nobody likes paper invoices anymore. Email your invoices; not only will they reach your client on time, they will also see it immediately. You will no longer have delays from invoices not reaching on time or being missed in the mail.
We cannot escape it; the internet is transforming the world, making it a smaller place with each passing day. Embrace it and let the internet change your life as well. It is a change for the better.
As a business owner you know how important it is for your business to receive payments on time. Unfortunately, receivable management is not easy. No matter how hard you try, you will always have a few customers who are perpetually late in making payments. This is where receivable management services can come in handy. Outsourcing accounts receivable management for your business can help you greatly.
- Time and Money Saving– The most obvious benefit, of course, is that outsourcing accounts receivable management can save you time. You will not have to get involved in the accounts receivable process or make time to hire personnel for the staff or invest in equipment and space for them. You can now focus on making more sales and growing your business.
- Access to Experts– You can rest assured knowing that your finances are in the hands of experts. Also since AR is their focus, they will be able to pay complete attention to your business and its needs. You also have access to a number of experts in case of emergencies.
- Effective Accounts Receivable Management– Outsourcing accounts receivable management can help you to receive payments on time. Accounts receivable management services have professionals who are trained to handle all payment scenarios and also employ the latest billing and payment techniques. All this means that you will find your AR situation greatly improved.
- Extensive Credit Checks– Accounts receivable management services conduct thorough credit research of your clients. So you can now know how credit worthy your clients actually are and where you stand with them.
- Day Sales Outstanding– Day Sales Outstanding tells you how many days’ sales are outstanding and unpaid during a set period. This is an important measure in AR management. Outsourcing accounts receivable management can mean that every single sale is recorded, tracked and your records are up-to-date, giving you a clear idea of where you stand on any day.
Receiving late payments is inevitable in any business; either your clients are difficult or stingy or simply forgetful. Unfortunately it is also possible that your client is actually facing money problems. Such clients are bound to give you trouble, but the question is how do you know for sure? How can you recognise if your client is having cash flow problems?
- Too Many Questions or Frequent Disputes– Do you have clients who always have a lot of questions to ask when they receive the invoice or who make it a habit to challenge the charges in the invoice? Despite all your efforts and receivable management services techniques, they will always have something to say about the invoice. This can be nothing more than a stalling technique.
- Gaps between Bill Payments– Clients with financial problems are likely to pay the first couple of bills promptly. Gradually they begin to take longer periods of time to clear their payments, until eventually they become regular late payers. If you see frequent delays in receiving payments, it is possible that your customer is having financial difficulties, according to receivable management services gurus.
- Repeatedly Claim They Haven’t Received Invoices– If a particular client constantly claims that he hasn’t received the invoice when you are sure you have sent it out, then you should keep an eye on him. This is simply because it is possible that your client is making up excuses and stalling for time.
While these signs are not accurate indicators of whether your customers are facing money problems, they can serve as warning signs according to receivable management services gurus. Repeated incidences should warn you that the particular customer is one to watch out for. Knowing your client and thorough research is the way to keep your business up and running. It would also be wise for you set in place a system so that you can avoid late payments and also a method to handle late payments wisely. The future of your business rests on it.
The Customer is King. Sure they are, which is why as business owners you have to keep them happy no matter how unpleasant they are. A big problem that business owners, especially small business owners face today is getting their customers to pay. Receivable management is not an easy task, but according to receivable management services gurus, there are a few simple things that you can try that can make collecting payments on time easier for you.
- Automated Reminders– How often have you forgotten to send out the payment reminders on time? Not your fault really, too many things going on; you have a business to manage after all. And that is why you should put a system in place that will automatically send out your payment reminders or invest in receivable management services. Then you can get on with your work and not worry about the payment reminders.
- Maintain Shorter Payment Cycles– The thing about long payment cycles is that when the bill arrives, your customer will find that he has a hefty payment to make. Shorter payment cycles will mean smaller amounts of money and you will not have to wait for your customer to make your payments. Decide on a date by date of completion of project or link the payments to specific deliverables or milestones and make receivables management easier.
- Incentives– Incentives are universal and never fail. Offer incentives like a discount or coupons for early or on- time payments. You cannot go wrong with this one. Just be careful when deciding on the incentive; choose one that you will be comfortable with.
- Maintain a Healthy Relationship with your Customers– Maintaining good relationships with your customers is important for the growth and development of your business. Who does not like working with someone that they like and respect? Besides if you have a good relationship, your customer is less likely to default on the payment as he wouldn’t want to jeopardize the relationship.
- Change with the Times– Don’t stick with the age old system of checks. It is time to accept that things are changing and technology is making things a lot easier for everyone. So be ready to accept the changes and use them. Accept credit cards, PayPal payments, e-checks and other new payment options. Your customer will find it less of a pain to make your payments.
Late payments and businesses go hand in hand, according to receivable management services gurus. What you can do is try your best to reduce their incidence.