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Finding the time and resources to complete every collection activity needed to be done at the optimal time to be done is a constant challenge. Most small companies come up short because the owner or CFO have more important things to do and there isn’t a dedicated employee responsible for credit and collections.
Inevitably they will need to initiate Collection activities to recover some of this money owed; in other words, contacting delinquent customers and requesting them to pay your firm for goods and/or services provided on credit terms that have become pastdue. it just might help them pay you sooner!
Commercial collections is no different. Collection myths can be found at the very root of bad decisions as well as informing counter-productive activities. Adhering to collection myths more often than not leads to bad outcomes. Simply put, collection myths get in the way of doing the best job possible. Subscribe now 1.
Successful collections require the coordination of a variety of activities: timely and accurate invoices and payment posting, monthly statements, email reminders and other dunning notices as well as telephone calls. The company had maxed out its line of credit and so was having some cash flow difficulties.
Photo by Icons8 Team on Unsplash Commercial collections is not unlike convincing somebody to buy something, but people with that talent tend to go into Sales. For most people, however, collecting B2B debts is an acquired skill. People do not aspire to become commercial debt collectors. it just might help them pay you sooner!
If you sell on open credit terms, you need to plan on having to expend time and resources collecting from those customers that don’t pay when due. No matter how much effort you put into evaluating customer credit, some customers will not live up to your expectations. You need to be doing the right things.
Photo by Kenny Eliason on Unsplash Effective collections is the single most important factor for achieving reliable cash inflows. Effective collections can also reduce bad debt losses by compensating for a liberal or weak Credit Control function. Procrastination only makes a pastdue situation worse.
Moreover, if you are trying to collect from a small business, you may have to deal with the owner, who will have a lot on their plate in addition to their debt to your company. New to collections? You should attend Introduction to Business/Commercial Collections on Tuesday, July 16 at 1:30 PM EDT. annualy, forever.
Finding the time and resources to accomplish all the collection activities required to do a good job is a constant challenge. Most small companies come up short because when there isn’t a dedicated employee responsible for credit and collections, the owner or CFO have more important things to do.
What’s Involved in “Cleaning” an AR Portfolio In a perfect world, your AR Ledger would contain only whole, current invoices; or at least nothing seriously pastdue. Over time, AR Ledgers unfortunately tend to collect “Clutter.” Please share this newsletter with your small business customers.
Keeping these latter two groups under control requires collection efforts. Photo by Michael Starkie on Unsplash ) At a fundamental level, collections involves contacting customers to collect the money they owe you. Collections becomes more challenging when the customer objects. Keep upping the pressure until you are paid.
Next comes billing, followed by collections cleaning up all the garbage left by everybody that has gone before. If you remember the Rocky and Bullwinkle cartoons, some seasons there was a parade during the closing credits. The collection role is a lot like that of the little janitor with the big mustache sweeping up behind the parade.
Inevitably you will need to initiate collection activities; in other words, start requesting pastdue customers pay what they owe your firm for goods and/or services provided on credit terms. What are the other tasks that will not get done or be delayed because of the time you devote to collections?
In the wake of the pandemic, CFOs found themselves with a new batch of supply chain and finance challenges — ones that have made it increasingly difficult to manage processes, collect cash and reach your accounts receivable goals. Historically, the processes within collections, cash application and credit management are highly manual.
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