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Collecting payments from clients isn’t always an easy task. There are times when the process is easy to manage, and there are times when delinquencies just start to pile up. During lean periods when the cash flow slows down, failure to collect money owed can lead to bigger problems in the future. Before issues pile up, it is best to assess the situation swiftly and to provide solutions as soon as possible.
To start off, businesses should check their collection process. Delays in invoicing are all too common cause of delays in collecting receivables. Business owners need to ensure regularly that their internal systems are totally current at all times. With a little diligence in this task alone, it is possible to vastly improve an organization’s cash flow.
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Second, business should also take time to review their communication methods. These days, diversifying and using more than one channel to send invoices has become an effective method to ensure that clients get the reminder they need to pay on time.
Finally, managing expectations is necessary. Being upfront with expectations of prompt payment is vital to ensuring that the client pays on time. Slow payers, when compared to delinquents, are often those who remain unconvinced that obligations have to be paid promptly. Some companies also make the mistake of waiting too long before they insist on collecting payments. It sends a signal to clients that delayed payments are acceptable.
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Other than problems within the business, it may also be a good idea to get in touch with clients to find out their reasons for delayed payments. Some clients may just have short-term problems that the business can help address, ensuring not just prompt payments but also a better customer relationship.
Brennan and Clark is a leading commercial collections agency that goes beyond the usual process to provide receivables support solutions that eliminate credit losses. For more resources on improving the collections process, like this Facebook page.
