Do Your Homework Before Doing Business: This is cold comfort for those struggling to squeeze a dime out of currently delinquent customers but good practice for new ones. Forward-thinking accountants can check the credit rating of a business through our burt risk scoring system while also checking references.
Set More Favorable Credit Terms: Stacking the deck in your favor is smart practice. One strategy is to require credit card payments; that way, the payments are predictable (i.e. you’re in control) unless the customer severs the relationship.
Explain Credit Terms Upfront: let your customer know that you’ll charge late fees after X number of days and then send it to commercial collection agency after Y number of weeks will be more motivated to pay on time. And requiring payment within 15 days instead of 30, offering incentives for early payment, can ensure that you’re at the top of the list for who gets paid first.
Use the “Velvet Hammer” Approach: Some business experts insist that treating customers as partners can go a long way toward putting your company’s name at the top of the list when it comes time to write checks. Some even say that tacking on interest only hurts the relationship and may even backfire.
If you’re still struggling to get paid using these methods, go to Tips For your Bottom Line provides some tips on how to get paid. or get an effective Collection Agency.
