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Improving Accounts Receivables Collection According To Receivables Performance Management Reviews

May 29, 2018 by Josh Leave a Comment

Improving accounts receivables collection is a necessity for most businesses these days. As the business grows, having to deal with client payment problems is a reality that should always be taken into account. Fortunately, there are always ways in which this can be done.

If you want to improve accounts receivables collection, the advice presented below should be taken into account. It comes straight from the offices of a highly respected national leader in accounts receivable management, as can be attested through Receivables Performance Management reviews.

Determine Problem Sources

The first thing that most businesses do is try to contact clients that have to make payments in order to start debt collection. This is not what should be done. According to Receivables Performance Management, the first important step is to analyze all past-due accounts in order to categorize them based on non-payment reason. This includes labels like customer billing disputes or poor credit. Only after you determine the source of the debt problem you can actually create a good plan to deal with it.

Minimizing Customer Credit Risks

Various things can be done to reduce risks of having to deal with debt collection problems. Some options recommended by Receivables Performance Management are:

Stop selling to customers that do not pay – Every business needs to have a written credit approval process that is monitored and that addresses problems like how creditworthiness is assessed and who will receive credit in the first place. If the possibility that an invoice will not be paid is high, the business can refuse to make the sale in the first place.

Assigning responsibility – One of the biggest problems in modern businesses is that there is absolutely nobody that actually has responsibility for debt collection. You need to have someone on staff that is well-trained and that regularly monitors statuses with the goal of meeting specific targets. If you wait for a long period of time to receive payments, there is a much higher risk of not actually getting paid.

Draft strategies to deal with non-payers – Collection procedures need to be spelled out. All steps that are going to be taken should be decided and respected. At one point in time, the service offered or the product the client buys should no longer be available for the client that does not pay.

Receive expert help – Most business owners will get some recommendations from attorneys about how the company can be protected. Besides this, you do want to get some extra help from experts in debt management and collection. This gives information about the best practices in collections and credit. Alternatively, you can always outsource debt collection.

Avoid Disputes With Billing

Disputes can only lead to delays in actually getting paid. Because of this, a much better approach is to simply avoid the disputes in the first place. You do this by being really clear with all customer expectations and requirements. Sale terms have to be put down in writing and all potential problems should be identified and fixed as soon as possible.

Filed Under: Business, Money

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My name is Josh and I'm the blogger behind 60 Degree. I discuss all kinds of topics, but my main focus is business and investing. Numbers are what I'm good at, so these kinds of topics come easily to me.

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My name is Josh and I'm the blogger behind 60 Degree. I discuss all kinds of topics, but my main focus is business and investing. Numbers are what I'm good at, so these kinds of topics come easily to me.

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