If your business sends invoices or bills on credit or at recurring intervals, you likely have customers who pay late or not at all. Delinquent customer accounts can affect everything from paying business expenses to destroying business relationships. Customers may be paying late due to a number of reasons, including lost invoices, expired credit cards, or the inability to pay. Instead of taking it personally, your business can follow these tips to recover the account in a professional manner.
When hiring someone to manage accounts receivable and collections, you're effectively putting your business in their hands. Think about it. If you need to ensure payroll and other business expenses are paid, you need working capital. The best way to gain working capital is to improve DSO (days sales outstanding) or the amount of time it takes to collect from credit sales. And the job of collections and accounts receivable specialists is to get those sales invoices paid.
Here are the top 5 qualities of successful accounts receivable and collections specialists.
Employers are struggling with finding workers even though COVID restrictions are being lifted across the country. According to a recent report, 42% of small business owners were unable to fill job openings and 91% were unable to find qualified applicants. These challenges are also affecting the work that's getting done within businesses too.
Here's how the job market is affecting client invoice payments.
It's so frustrating when unpaid invoices are piling up, even after you've called, emailed and sent friendly reminders. At this point, many businesses will simply write off the invoices as bad debt and move on. If you've taken on too much bad debt or let far too many invoices go unpaid, it's time to bring in the professionals. Let us remove the hesitation and complexity of it all.
Here's how to hire a debt collections agency for your unpaid invoices.
If your business has sent bad debt accounts off to a collections agency, you likely have questions about recovering that debt. Typically, commercial collections agencies only charge a fee if they're able to collect. The agency should also be transparent about the collections process and the documentation along the way. But you may also be wondering how long they'll work on your behalf before you take the case to court.
How Long Can a Collection Agency Attempt to Collect Business Debts?
Chasing down an unpaid invoice can take away time and resources that could be better served elsewhere in your business. It's important to understand when and how to follow-up on invoices. Obviously you don't want to appear too needy but you don't want your clients getting away with paying late or not at all, either. And when should you get help from a professional collections service?
When exactly is the best time to send an invoice to third party collections?
If you've agreed to contract with another business, you are providing valuable products and services that benefit their company's success. Likewise, their payment to your business is cash flow that keeps your company running smoothly. When your business fulfills its obligation but your client doesn't pay, it could sour the relationship and put your cash flow at risk. There are steps that your business can take to ensure payment prior to taking legal action. Or you can work with an professional agency that takes these steps with you.
Get yourself a partner who does accounts receivable, bad debt collection and helps with litigation. B2B Debt Collections in 1...2...3.
The internet allows for businesses to sell the use of software (and hardware) and revenue is collected either yearly or monthly as a subscription service. The as-a-service or subscription business model is sustainable as long as payments are received. Because client retention is very important to this business model, debt collections must be handled with business relationships in mind.
Here are four things to consider when sending SaaS clients to debt collections.
In the age of social media and rapid-fire news stories, it's important for businesses to consider their brand reputation. If your accounting team outsources its bad debt or unpaid receivables to a collections agency, it's also important to protect your brand. Quite simply, a negative experience with a collections company could sour business relationships and your branding.
Does your debt collections company offer brand protection?
Just like when any relationship turns sour, you're left dealing with the things you couldn't agree on. Unfortunately, when your good business clients refuse to pay or communicate, it may be time to bring in a mediator to ensure your assets are protected and your agreement holds up. Whether you've decided to escalate their continued late payments, write off their account as bad debt or pursue litigation, you don't have to do it alone.