10 Tips to Speed Up Collection of Your Accounts Receivable

Any business owner knows this all important rule – a sale isn’t a sale until the cash is in your bank account.

Collecting accounts receivable may not be the most pleasant task when running a business, but it’s one of the most important. Not having enough operating cash when you need it will undoubtedly affect the bottom line of your business, and if cash flow is poorly managed it can even put your business at risk.

Here are some helpful tips to stay on top of your accounts receivable and improve your credit to cash results:

1) Send out bills promptly. Your best chance to get paid is in the first 30 days. Outline the agreed terms of payment (this should be agreed upon at the time of sale) and indicate interest will be charged on late payments.
2) Make sure invoices are accurate and provide correct mailing addresses and contact information since errors provide an excuse for not paying.
3) Make it easy for your customers to pay you by offering all standard payment options – credit card, cheque or direct deposit into your bank account.
4) Establish a schedule for collection for each account. Don’t wait until an invoice is past due before taking action.
5) Call right away when an account reaches its due date for payment. Don’t rely on letters, faxes and emails that can be easily ignored.
6) Attitude counts. As it can be uncomfortable asking customers for money have a trained accounts receivable manager with client-friendly skills make the calls. Treat them as customer services calls, not collection calls, as you don’t want to loose your customers.
7) Develop long-term business relationships with your customers. They will be less likely to delay payment if you are on friendly terms.
8) Be flexible but firm. If necessary work with your customers to establish a repayment schedule but be firm in holding your customers accountable to meet their financial obligation.
9) Be persistent. Often a customer will pay the invoice for no other reason than to stop receiving your calls and reminders.
10) No matter how diligent you are about your collection process, there will always be some customers who will not pay you. In the same way people can buy insurance to protect themselves from job loss or disability, companies can buy credit protection with Veri-Cheque’s Accounts Receivable Guarantee program to protect your business from financial risk when customers are unable to pay you for goods and services they purchased. Under this program, Veri-Cheque pays you for any past due invoices including bankruptcies. In addition, Veri-Cheque offers a Cheque Guarantee program, where you receive payment for any returned guaranteed cheques on authorized C.O.D. orders.

As a credit authority to businesses, Veri-Cheque’s Credit Protection and Cheque Guarantee Programs allow companies to safeguard their commercial accounts receivable against unexpected financial losses. Companies are guaranteed payment for goods sold to customers anywhere in Canada and can even extend higher credit limits to their customers, thus reducing the chance of nonpayment, in effect allowing them to grow their sales risk-free.

Our company’s credit managers work with each company to better manage their business and increase profits. We assume the risk of nonpayment and eliminate the need for expensive debt collection services. Give us a call at 800-268-3284 and we would be happy to discuss your business’ credit protection needs.