How to Improve Collections | 8 Accounts Receivable Tips

Get customers to pay with these collection tips!
8 Simple Ways to Improve Accounts Receivable

Believe it or not, getting customers to pay you quicker is not as complicated as it seems. It's about being specific, consistent and staying on top of your accounts. In this video we will explore 8 simple ways you can make the process of collections and accounts receivable a little easier

Create a Credit Application: this gives you a chance to get as much info as you can on customers in order to make proper credit decisions. If you decide go forward, be sure to have them sign a contract that states clearly the amount due and terms for payment. This will ensure and easy and smooth collections and accounts receivable process.
Credit Limits: Think about starting with moderate terms, allowing them to work up to more flexible ones. This gives you a chance get to know customers' payment habits, while providing customer incentive for on-time payments, as a result ensuring collections and accounts receivable goals are met.

Creatively Communicate: Why not follow your customer on social media, even commenting on their posts once in a while. This creates an emotional connection, making it harder for them to pull a fast one on you. When it comes to collections and accounts receivable customers are more likely to pay if they like you.

Start Early: If it's a week before payment is due, and still no check, shoot the customer a friendly reminder email simply reiterating the due date. No need to be harsh, remember they haven't paid late yet! Just a way to get a head of the collections and accounts receivable process

Don't Wait: Believe it or not, some of your customers haven't paid because they just forgot. First rule of collections and accounts receivable is as soon as the payment is past due, send a reminder letter. Try not to be generic, the language should be specific to the customer.

Collection Call -- if you received no response to your letter, it's time to get on the phone. Although it's easy to sympathize, accounts receivable is about action and you must require some from the customer. Get acquainted with the most common late payment excuses and learn how to respond to each one.

Installment Plans - When you do come across a customer who is in a financial hard spot, installment plans are key. Being paid back in a smaller amounts over time is MUCH better than a customer not paying you at all. This is all part of the collections and accounts receivable process

Finance Charges and Rewards - Whether it is to have consequences for paying late, or rewards for paying early, help give customers a little push in getting that cash to you on time. Consequences and rewards is a great strategy for improving collections and accounts receivable

[brandonspiegel]

This is super helpful, thank you for the great video!