For over-burdened business owners, handling past-due accounts can be a thankless, time-consuming task. That’s why so many firms choose to take action only when receivables are 90 days or more past due. This tactic may result in limiting your cash flow and profits.
In an effort to assist the parties involved before it becomes a legal issue, Wes has a few suggestions:
- Stay on top of unpaid receivables and create a safety net in the form of a tighter credit policy.
- Set up an accounts receivable aging report so you’ll be able to recognize non-payment patterns before thy get out of control.
- AllBusiness.com reports that, “Studies reveal that the likelihood of collecting receivables drops drastically as time goes on-from more than 90 percent after 30 days to 74 percent after 90 days and just 50 percent after six months.” With that in mind, establish a policy that any customer 35 days past due, will receive a friendly phone call as a reminder.
- Since missed payments can and do happen, consider working out a specific deal with a customer who’s honestly had a cash flow issue. Establish a realistic payment schedule and identify a pay-off goal day. Have it legally drafted and both parties must sign in front of witnesses. Only do this for very special cases.
- Follow up courtesy calls by mailing past-due notices and letters by regular mail – not e-mail! Sometimes a little humor can go a long way, such as a postcard with an appropriate graphic and a message like, “Please pay your bill so I can pay mine.” Always include a phone number in case the customer needs to explain his or her situation.
If 90 days or more have passed and you still have not received payment, it’s time to contact the office of Wesley Scott Jones: 910-256-5800. Let Wes help you recoup past due accounts in a legal manner that will deliver results.