Smart Collection Strategies for Tough Times

Smart Collection Strategies for Tough Times – What to Do When Customers Won’t Pay

If you extend credit to your small business customers, chances are you’ll eventually encounter someone who refuses to pay. Read on to learn how to net the money you’re owed.

The prompt collection of accounts receivable is key no matter the economic environment, but it’s critical during tough times. Unfortunately for many small businesses, there is now a growing trend among large corporations: They’re taking longer and longer to pay their vendors. In some cases they pay up to four months after getting an invoice. As these large customers stretch their payment terms, their vendors are seeing their cash flow cycles squeezed tighter. This makes it more important than ever for small business owners to ensure they collect receivables as efficiently as possible and keep cash flow running smoothly.

Efficient receivables collection requires a companywide effort, bringing together accounting, management, sales, and other critical departments. For best results, call together key representatives from each of these divisions to devise a comprehensive strategy before too many of your receivables are past due.

If you don’t have one already, your first step should be to create an accounts receivable aging report. This report tracks the payment status of each customer and the amount due. It sorts customers into categories according to payment status: 0 to 30 days, 30 to 60 days, 60 to 90 days, and past 90 days.

To read more click here

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Scroll to Top