As we shake off the fact that another year has come and gone, we’ve got to come out of the ether enough to realize that chances are really good that you’ve left some money on the table.
No matter how good you think your procedures are, chances are, there are some easy ways to collect more of what you’ve provided (or sold) and still keep the customer happy.
Well, for starters, how solid are your credit policies? All too often, companies fail to have effective policies in place detailing exactly what the policy is – or if they do, many times, that policy is outdated. With the revolution in internet systems, banking, and charges that has taken place in the last ten years, chances are, your credit terms and conditions have multiple holes in them. Sadly, too many times, especially in the service industries, chargebacks can’t be defended against because creditors don’t have – and make clear – what the rules are.
Additionally, creditors sometimes ask us to add collection fees that were not included in the original agreement that their patient or customer signed. However, to do so would be a violation of federal regulations. The clause stating these fees be paid by the consumer MUST be included in your original agreement with them.
Along these same lines are engaging software suites to handle accounts receivable. Even better? Making sure that the very same credit policies that we just mentioned are outlined and electronically signed by clients at the time of service. By deploying software in the credit strategy, you can make sure that there is a clear path that can be followed (automatically!) for your A/R personnel.
That exact type of automation can allow you to provide your customers with online and self-service options that can allow them to pay when it is convenient for them. Think about it – if you are only open to receive payment during business hours Monday –Friday, some folks simply cannot get to you! Of course, there is always “snail-mail” but depending on your volume, postage rates and printing costs can be daunting, plus there is no way to know for sure that the client even received the bill – and they still have to mail it back. (We know of at least one county in Georgia that automated the payment process on business taxes and saved $100,000 annually in postage alone!). Make it easy for your customers to pay you – via an online portal accessible anytime. Even something as mundane as a drop box can increase collections.
Now, one concept that seems sort of counter-intuitive is that when you have stronger policies and more automation, you simply have fewer accounts to manage. To put it bluntly – people pay more often when there is a clear path to payment and the expectations are managed. What can this mean? Honestly, less staffing in the accounts receivable department. Too many times, we see that companies “staff up” A/R departments as a solution to cure the wrong problem. Increase your staffing to develop the solution – not just to solve a problem.
Realistically, there will always be some people who are unwilling to pay … that’s a fact of doing business. When that time comes, experts in the field, like the debt collection specialists at Credit Service Company can help.
On the other hand, sometimes only a few minor tweaks can lead to big results for your company, so try deploying these as we ring in the new year – and look forward to seeing a positive difference in the new year!