Companies do well when they build relationships with their clients that are based on trust. But sometimes customers do fall behind in payments to purchase goods or services that they have received. There are a few ways to attack this issue.
First of all, gather an inventory of your receivables. By doing this you will be able to track the trends in your customer's payment histories. It is a good idea to review your accounts receivable at least once a month. To help you, use accounting software programs that can give you this information in a report that tracks the age of your receivables. This will aid you in avoiding accounts that eventually become debts that are uncollectible.
Some of the time, the consumer may be capable and ready to pay up, but your invoice has gotten lost or has fell to the bottom of their finances pile. It's a good idea to send out monthly statements that recount the status of your consumer's accounts to update them on what is owed.
If an account still remains outstanding after these steps, do not be afraid to personally call them and tell them that you are expecting a payment.
If your attempts to remind your consumers of the bill don't succeed, stronger action might be needed. Mail the customer a demand letter that contains documentation of the fact that your company has delivered goods and that the client was billed for them. Let them know that they are now in breach of contract. In the letter, state when payment is required before further action is taken, and what your next step will be.
Typically the next step will be to take legal action. If it is a small amount of money you can take your case to a small claims court. For a large amount you should take the case to civil court. Be sure to document the agreement between you and the customer and that you pulled your weight by delivering the promised goods or services.
Mallory Megan works for a debt collection agency. She also composes stories on business and finance, consumer spending, and debt collection.
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