When dealing with accounts receivable, it can be easy to put off having a policy in place to protect your business. As unpleasant as it can be do deal with customers who aren’t paying their bills, it is far worse for your small business to do nothing and hope the issue doesn’t come up.
Here are five mistakes small business owners commonly make in terms of collections:
- Not having a standard policy. Your business’ credit policy should be standard and written, and should include the payment due date and what will happen if the payment in not made.If there is a fee for late payments, make sure it is stated in the policy.
- Not acting early. As soon as it becomes clear that a payment is not going to be made, contact your customer. Sometimes a minor revision in something like the payment schedule can make a big difference. Waiting only delays your business from getting its money.
- Not following up on previous efforts. After contacting the customer once, it may be tempting to set it aside for awhile. That can give the customer the impression, however, that the heat is off for the time being. Instead, keep the contact information handy and if payment isn’t made when promised, call again.
- Being too soft. Today’s caller ID technology makes it easy for customers to avoid your calls. Be persistent until you make contact, and then set a firm date for payment.
- Not stepping it up. If your customer still hasn’t made a payment, don’t just keep doing the same things to collect. Increase your efforts to make sure the customer knows that you intend to collect your money. Be sure you are in compliance with laws applicable to collection in your area.
It may be helpful to your Maine-based small business to consult with an accounting professional. Call Filler & Associates to talk more about how to cut down on collection nightmares.