October 5, 2015 | Debt & Financing
All Maine-based small businesses have their share of customers who take forever to pay, and even plain old bad apples who just won’t pay up.
Some companies, however, seem to be battling long and unproductive billing problems with their customers more often than not. Business owners want to avoid falling into this rut. If more than five or ten percent of accounts are falling into the dispute category, owners and managers should take corrective action to see that they get paid.
Generally, collection problems result from three basic categories of customers:
- Those that are unable to pay. These include things like insolvent or bankrupt companies, but it could also be something like the death of an owner. Small business owners shouldn’t waste a lot of time on accounts like these. Usually, there’s really nothing that can be done, other than wait for a settlement in hopes of recovering something.
- Those that are financially strapped but are able to pay. Customers that fall into this category could go to a bank and borrow money. When they say they can’t pay, it really means they’ve chosen to pay someone else first. Small business owners and managers need to be able to convince these customers that their company takes priority for payment.
- Those that refuse to pay. These customers have the financial ability to pay, but they chose not to, usually because of a billing dispute. These types of accounts should be resolved within in 48 hours. If it takes longer, the problem only gets bigger.
Once a business owner has the overall picture of which category their customers fall into, they should take the following steps to get better results from the latter category:
- There should be strict deadlines for resolving billing disputes.
- Once a dispute is resolved, corrections and credits should be posted to the account immediately.
- Finally, make sure to let customers know when disputes and any errors have been corrected.
If small business owners resolve billing disputes promptly, they have a better chance of collecting past due accounts, and maintaining other accounts in good standing. To learn more about becoming better at resolving billing disputes, schedule an appointment with Filler & Associates.