Friday, January 8, 2016

Tips for Collecting on Past Due Invoices

Most business owners, if pressed, would admit that they have an unhealthy collection of past due invoices filed away somewhere. And, even though these business owners are often embarrassed by their “secret shame,” the truth is that they’re not alone. In fact, about two thirds of American businesses are dealing with this problem.   

Fortunately, there are things you can do to help remedy this problem. One key is to speak with customers early on in their delinquency. In fact, the sooner you establish communication, the better because the longer an invoice goes unpaid, the less likely it is you’ll ever collect on it. Below, we’ll detail a few other things you can do to reduce your number of unpaid invoices and other collections problems.

Make Your Move Early On

As mentioned, the sooner you can act on an unpaid invoice, the better. You really need to be contacting delinquent customers the very day their payments are late! And, if that seems harsh, keep in mind that, at this stage of the game, you can keep your communication polite and friendly- make it a helpful reminder instead of the warning it really is.

Below are some simple tips for effective early communication:

l  Send emails AND make timely phone calls; you want to give yourself a better chance of actually reaching them.
l  If you receive no response, repeat the phone call/email approach.
l  Continue contacting customers with each passing 30 day window.

If these early tactics don’t work for you, then you’ll have to resort to a very strongly worded demand letter, which should detail exactly what will happen if your customers don’t pay up.  The last thing you want is to become known as the business that “does nothing” to delinquent account holders; that will just attract more of them!

If you can follow these tips, you’ll have a much easier time collecting on past due invoices and, hopefully, you’ll also be able to eliminate the number of them you have altogether. #CollectingOnPastDueInvoices

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