Friday, April 3, 2015

Protect Yourself

You might think that you need help with outsourcing accounts receivable, but really, wouldn’t it be better if you didn’t have a bunch of delinquent accounts in the first place? While there’s no way to ensure that you never have to deal with a late payment or a non-paying customer ever again, there are things you can do to greatly reduce the number of late or non-paying customers you are likely to have.

To begin with, make sure that you get everything related to your business transactions in writing and upfront, before any money, goods, or services have been exchanged. You should have a clear
business contract that specifies how much the customer owes you, when the money is due, and what he or she will get in return for the money. Having this agreement leaves no room for miscommunication and will give you a legal leg to stand on should you need to collect your money via that route.

It goes without saying that you should also be doing some “checking up” on potential customers. Before extending any kind of credit to someone, run a credit history check on that individual or business. If you find a lot of unpaid accounts, late payments, or other “red flags,” you may want to think twice before extending credit.

If you’re set on working with a particularly risky customer, then you may want to require some kind of a deposit upfront. You can offer “secured credit,” in which the credit extended is partially secured by the deposit, or you can choose to only deliver goods or services once a deposit or partial payment has been made.

Today’s business world is cut throat, and it’s all too easy to lose more money than you make. Don’t let that happen to your business. Be careful about whom you choose to call a “customer,” and you’ll save yourself a lot of trouble (and money!).

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