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Customers Don’t Pay On Time? These Tips for Collecting on Overdue Accounts Can Help

Maintaining positive cash flow is one of the biggest challenges for a small business. This can be especially challenging if customers do not pay on time. The following are tips for collecting on past due accounts receivables to ensure your business continues to operate successfully.

  • Inspire Good Will: Instead of using a heavy handed approach to collect overdue invoices, consider the opposite approach…send a small gift or simple greeting.  Sometimes a simple reminder that you value the relationship will inspire enough good will (and perhaps guilt) that your customer remits payment in return.
  • Act Quickly: Start by making phone calls followed by letters to upper-level managers. If that doesn’t work, ask your customers if they’re willing to pay in installments or offer reduced settlement payments. A collection agency can be used as a last resort.
  • Keep Detailed Records: In order to accurately track the status of your receivables, it’s important to document all the details of correspondence including invoice dates, payment terms, phone calls, emails, late notices, etc…  In your written correspondence, be sure to clearly state the consequences of further delays in payment. By keeping a detailed record and setting the right expectations from the get go, you’ll have everything you need to make your case if you have to take legal action or end up sending the account to collections,

Did you know that FACTOR KING® provides professional collections on all open receivables? Our trained collection specialists will always recognize that they are dealing with your most valuable asset - your customer. Factor King is a direct financial service provider that specializes in the factoring of invoice receivables for companies that maintain commercial accounts receivables. We can manage your record keeping and offer fast processing of accounts receivable payments.  Apply now to convert your company’s assets into immediate cash!

Related Articles:
3 Business Tips for Getting Organized for Tax Season
Startup Capital: Top Ten Benefits of Factoring Invoices
5 Tips for Managing Invoiced Receivables

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