Ideally, your business will carry out its services and be paid the agreed amount on time. Usually, this is precisely what happens with the majority of your clients.
Unfortunately, it doesn’t always work out this way. Delayed or missed payments happen for numerous reasons, and these can impact your bottom line.
A successful collections strategy can help you to stay on top of missed payments. Outlined below are a few things to keep in mind.
The keys to successful collections
Many companies make the mistake of only putting a collection strategy in place when payments are overdue. It’s important to do this before payments are overdue.
The keys to successful collections strategies include:
- Reviewing your processes: It’s important to set out a clear collections policy and review it regularly. You’ll also want to routinely review your invoicing policy, technology and communications protocols. This will help ensure prompt payments.
- Easy payment methods: Preferred payment methods will vary depending on the client. Some clients may want to stick with cash, while others may want to utilize apps and other payment technology. You should be as flexible as possible in this area.
- Proactive measures: The more proactive you are about payments the better. Send invoices before the due dates so that the client knows where they stand. In your contract, you may want to include late payment terms or a discount for early payments.
- Use a third party: Collections can be tricky. To protect your reputation, you may want to bring in third parties that deal only in this area.
We help businesses seeking to implement effective collections strategies that adhere to the law. Feel free to contact us for a consultation.