Excuse me, is that a wolf at the door?

Oh, wait…it’s just a bill collector.

Is that how you feel when you ask for your open invoices to be paid?  You really shouldn’t because it is really your client’s responsibility to keep their cash as long as they can. But that doesn’t mean you shouldn’t be paid.

What comprises a good collections management system? Well, the last word is critical: system.  You have to have a system and an effective plan to ensure that invoices get paid and on time.

Here are a few ideas that could improve your collections:

  • Create and use an accounts receivable (A/R) report.
  • Be proactive in your collections.
  • Move fast on past-due receivables.
  • Consider an early payment discount
  • Offer payment plans.
  • Diversify your client base.
  • Partner with your bank to manage cash.

Whatever you choose to do, be systematic, polite and professional.  While talking about money can be a pain, kindness and understanding go a long way.  However, being firm and clear is also a big part of the equation of collections.

For more on how to manage and make your collections, call or write to us.  TFO Solutions is dedicated to helping entrepreneurs and business owners with their finances from the back office to the boardroom.

*photos courtesy of Unsplash