Many small to mid-sized businesses find payments to be their most significant challenge. Odd, we know, but all too common. You’d think companies would want to develop the simplest way to accept and receive money. This is especially true of the ARM/collections industry.
Collections are fraught with outdated systems and methodologies that make collecting on-time payments from their customers a nightmare. Over time, invoices pile up, accounts go past due, and cash flow dwindles. Implementing a strong collections strategy is vital to your business. While you can’t force clients to pay on time, you can change how you operate to be more efficient and convenient to improve your cash flow.
Make Payments Easy
You need to facilitate a convenient payment structure if you want to receive your money on time. A web portal that allows customers to pay when and where they want is ideal. More payment options mean that clients can use their preferred methods to quickly and easily pay off their monthly balance.
Prioritize Invoicing and Billing
While billing isn’t a lot of fun, it should be top-of-mind. One of the most critical elements of your business is cash flow. The more quickly you invoice your client, the more likely you will receive your payment on time.
Building A System
Losing track of bills and invoices can be all too easy. Having an organized numbering system is vital. Consistency is the key if you want to ensure you receive payments on time.
It’s normal for a business to set appropriate payment terms when sending an invoice to a client. Usually, the terms for collections are “Net 30” for invoices over $500. Lower amounts can be due as soon as the client receives the invoice. Make sure you note the payment terms on every invoice.
One easy way to improve on-time payments is to utilize SMS payments to send quick reminders and have them pay using nothing more than the phone in their pocket.
Building up a strong client/business relationship is a top way of keeping accounts receivables flowing. Using polite language to follow up on invoices is more likely to result in a payment.
Although invoicing and payments can be challenging, every business must address them. Taking these steps now can set your collections business up for success in the future.
These simple tips can go a long way toward helping you receive more money on-time.