This year our readers made it very clear which articles they found to be the most interesting, since they kept coming back for more! Most of the articles have a common theme of how-to’s or pre-created templates. These articles help collectors everyday to make them more efficient and reduce their accounts receivable. To find out what all the hype is about, take a peak at our most popular blogs in 2017 and check them out for yours
When it comes to managing accounts receivable, communication with your customers is of critical importance and a collection letter is a major part of this communication strategy. The first collection letter should be sent to your customer as soon as the invoice in question has gone past due. As time goes on and invoices continue to go unpaid, your collection letters will change – you don’t want to send the same message to a customer who is 10 days past due as you would to someone who is 90 days past due – so it’s important to set the tone and timing of your collection letter carefully. In this blog series we’ll walk through the various stages of the collection process and provide a sample collection letter for each step.
Studies show that the more contact you have with customers, the more success you will have with collecting your open accounts receivable on time. One great way to contact customers is via email. The least amount of work goes into this step, especially if using an automated email service which sends out pre-created emails to customers automatically. However, you can’t simply send the same email to every customers. Some may be later than other, which means your tone should be different for each. Many of our customers have also found that emails that sound exactly the same over and over will eventually get ignored by customers.
If you have gotten to the point where you are now sending your third collection letter, there is definitely something wrong and the likelihood of collecting the invoice on your own is getting slimmer every day. While you have done your best to work with the customer, it’s time to send them their final collection letter and let them know you’re serious. You must let the customer know that, without payment, you will have to involve a lawyer or a collections agency. Just like every other invoice collection letter you have sent, there is a right way and a wrong way to write this one.
No one said using Excel is easy. In fact, it can sometimes make you feel like you’re sitting back in high school Algebra with those long string of parenthesis and if-then statements. Instead of trying to pull these statements out of thin air, we’ve put together how to create an aging report in Excel for you. We’ve included all the statements needed to find out who is the most overdue and how much money you’re owed.
n the first part of this series we talked about the first collection letter, the purpose of which was a friendly reminder letting the customer know they are late on their invoice. If, after sending this first collection letter, you still do not receive payment or have yet to even hear from your customer, it’s time to send another letter. While the first letter was more a friendly reminder to your customer, this letter will increase your tone slightly, to let them know you mean business and it’s time to pay.
Monitoring your accounts receivable performance is the first step in improving the way you manage it; after all, “If you don’t know where you are going, you will probably end up somewhere else.” (Laurence J. Peter ). Below we’ve compiled and explained, in plain English, some of the most important metrics you should consider when measuring accounts receivable performance and how to interpret them to better gauge the health of your A/R and overall cash flow.
You have weighed the pros and cons of extending credit to customers, have deemed the customer in question to be a good credit risk, and now you need to figure out how much credit to offer. This is not something to gamble on, setting appropriate credit limits is important to ensure you are giving the customer what they need, but also protecting your organization against financial instability. Here are three ways to determine credit limits for customers to help you reap the benefits of credit sales while mitigating the risks.
Making collection calls is never easy to do. No matter how long you have been doing it, there is always someone that ends up throwing a curve ball and you simply don’t know how to respond. The best way to handle this possibility and lose your fear of collection calls is to prepare ahead of time. We’re going to cover five easy steps to help you prepare for each collection call and collect what you’re owed on every one.
On the surface, extending credit to customers seems like a no-brainer since it can be a great way to attract customers and build profitable, long-term relationships with them. But there is more to it than that. Offering credit to a customer, especially a new customer, is not something to jump into in your haste to close a deal. This can cause trouble with cash flow and hinder your ability to meet the organizations financial obligations. Always consider the pros and cons of extending credit to customers before jumping into an agreement.
At this point you’ve worked very hard to collect the invoice from your customer directly; you have made numerous phone calls, sent emails, left messages, and sent three previous collection letters. At this point it’s time to let someone else take over, such as a collection agency or the courts. You’ve already warned your customer that this could happen in the third collection letter and while it is not mandatory that you send a notice to let the customer know you have followed through on that warning, it can smooth the transition for all parties involved and may even inspire them to contact you.