The objective of an effective collections policy is to ensure that clients pay on time. The policy will also determine what happens when the client doesn't pay within the timeframe of their payment terms. When your business is struggling with cash flow or falling behind on collecting what's owed, it could be a sign that the policy needs updating.
The holidays are a special time when your business breathes out a sigh as one year ends and another begins... Right?
Before that happens, there is much to do! The end of the year signals the looming beginning of tax preparation and budget decisions. It also means closing out the books for the year and discovering delinquent receivables.
While we typically write about the end-of-the-year processes for accounts receivable, year-end brings about its own stress for the sales and marketing teams. With quotas to meet and budgets to assess, the challenges can weigh on even the most seasoned professional.
When it's your job to collect past-due invoices, what you say matters. And what you say will depend on your state of mind when you type the email or get on the phone. How you come across to your clients, especially when they're long-term business-to-business relationships, will determine how they react to you, your demands, or any negotiation tactics. It's important that you're well-prepared.
If you're reading this, it's more than likely because you've done everything you can to get a client to pay, including asking nicely, and they're simply... not paying. You may be wondering if you have any recourse at all and you really, REALLY, need to get back to running your business. Hiring a professional debt collection agency seems complex and a little uncertain. Maybe your only interaction with debt collection was as a consumer and that wasn't a positive experience.
In a recent Forbes article, the contributor suggests that older entrepreneurs outperform younger startup founders and lists numerous examples.
The article goes on to state that as individuals age, they're more likely to build a successful company. What is it that makes this statement true?
When making the decision to use commercial debt collection services, businesses should be choosy. Not only are you selecting a company that should be efficient in recovering what's owed to you, but your brand reputation is also at risk. The collections specialists will be speaking to your clients on your behalf. It's imperative that they're able to be a fair but authoritative representation of your company.
If we think of cash flow as important as oxygen to the human body, then accounts receivable is as important as the lungs. When extending credit to clients or invoicing them for goods and services, we're expecting pure, clean cash to flow back into our business. If invoices remain unpaid or the client's credit is unreliable, then the cash flow becomes clogged, effectively killing the business.
Growing a new company isn't for the faint at heart. Employees must be passionate, willing to go the extra mile, and work long hours as part of a cycle of endless expectations. With so many American employees complaining of burnout and "quiet quitting," startups are facing the same struggles as enterprise companies.
When selling your goods and services to another business, it's wise for both parties to sign a legally-binding agreement. This agreement will set expectations for both parties as well as provide proof of the arrangement if one of the parties doesn't come through. A contract is an invaluable record that you and your business client are willingly working together.
