The prospects of a recession are raising fears that businesses will not be paid as quickly for goods or services rendered.
An expert offers advice and a solution for business leaders concerned about their customers’ ability to pay bills on time.
“Small business owners frequently deal with chronic late payment and bad debt issues, and this costs their business time and money,” says Ryon Gambill, president and CEO of Marauder Corp. and a collections professional.
“The most important aspect of getting paid on time is being clear about what work was done, how much should be paid, and by when, he added.
To reduce the need for collections measures, Gambill advises business owners to implement the following tips into their invoicing and accounts-receivable procedures:
- Add a bold due date to your invoice.
- Make a courtesy call to verify your customer received your invoice. This is especially important if this is their first credit transaction with you.
- Make certain that all customer service issues are addressed immediately so that they cannot later be used as an excuse for withholding payment.
- Do not accept temporary checks with handwritten account numbers on them, or a check number below 200.
- If the credit transaction is being done in person, verify the customer’s identification. If the credit transaction is being done over the phone, attempt to verify the customer’s information via the telephone directory, a Google search, a Zaba search, or some other online database.
- Have the customer acknowledge acceptance of the terms by signing (and dating) the invoice. This can ensure protection against later fraudulent charge-backs or stop payments.
- Start collection efforts immediately when the account or invoice becomes past due. Even reputable companies and consumers run into financial difficulties so it’s important that you stick to your policies and inform your debtors when they are late on payments.
- Remember, the squeaky wheel gets the grease. Don’t give up easily and remember not to take it personally when a customer is unwilling or unable to pay,
It’s surprising how many smaller companies don’t have this process adequately defined,” says Gambill.
“When a company runs into problems, it’s those creditors who can prove that the work was ordered, performed to specification, and invoiced according to agreed procedures who will be paid first,” he points out.
Chasing down a debtor who is overdue in settling a past-due invoice can be a frustrating and time-consuming part of running a small or medium-size business. What many business owners do not realize is that timely invoicing and follow-up means fewer collection problems.
To help businesses deal with past-due invoices, Gambill’s company sells Bill Collector In A Box, at http://www.billcollectorinabox.com/.
It is a comprehensive billing and debt-collection software application designed by collection agency professionals. Bill Collector In A Box centralizes the management of past-due accounts, from initial contact to resolution of the outstanding invoice.
For businesses that already have debt-collection problems, the company claims that the software pays for itself within months.
“We designed Bill Collector In A Box so that small-business owners can take the right steps to resolve past-due accounts, and turn debts into revenue.”