One of my favorite things about what we get to do around here is helping our clients find “missing money” in their businesses. Whether it’s through cost reductions, profit analysis, tax planning (LOTS of money can be saved there), or other means, what we are able to do for our business owner clients can often be likened to diving for dollars.
A treasure hunt, if you will.
I thought I would take a few paragraphs to encourage you to get a little more creative over ways that you can do the same for yourself in your business.
What To Try When Your Business’ Receivables Are Slowing Down
“Action is the fundamental key to all success.” – Pablo Picass
Many different types of businesses suffer from the problem of accumulated “past due” receivables.
And it’s a problem which shouldn’t *just* be addressed by “normal means” (calling, pestering, etc.).
The good news is that you don’t have to accept the normal status quo — you can actually change the way the game normally works. How? Well, I suggest that you use tactics similar to those which WON you the sale in the first place: discounts, premiums for advance or prompt payments, and good old multi-step follow-up.
If you do have (or ever develop) a receivables problem, you’ll need to take this same sort of aggressive action to clean it up. “Preserving the relationship” with a client who can’t (or won’t, more likely) pay his bills is of little value. And, left alone, collection problems tend to get worse, not better.
Even large, long-established corporations can find themselves in trouble with their payables. In that situation, you as a creditor could wait years for your money and then recover only a percentage of it.
So it’s important that you set into place a *system* for collecting past due accounts.
Because one of the most important lessons that I’ve learned over my years in business is that trends rarely reverse themselves. Trends don’t just change; people change trends. Waiting, procrastinating, delaying action on a negative situation simply means it won’t change — at least, not likely for the better.
When you get that very first glimmer of something “not right” in your business (especially in a financial area), that’s the time to look closer and take corrective action. Too many people spot the tip of a problem and choose to ignore it, feeling they’ve got enough to handle already, so why go looking for trouble?
The fact is that you need a bias for “sales” in every area of your business — even collections.
So, turn your marketing mind onto it. What incentives can you provide to delinquent customers? How can you “cut through the clutter” so that YOU get paid (while other vendors wait … and wait)? Good headlines, conversational appeals, and multi-step follow-ups are good places to start. And “starting” on this issue is the biggest step.
From there, set it into place so it happens automatically.
And then you’ll notice the “trends” changing in your favor.
Ibanessa S Hogan
Masterpiece Accounting Services