6 Billing and Collections Tips to Make Your Business Life Easier!

6 Billing and Collections Tips to Make Your Business Life Easier!

Collection calls are no fun. However, they are, unfortunately, necessary for most businesses at some point (even if it doesn’t become a regular occurrence). Delinquent accounts affect your bottom line. In addition to affecting your profit, collecting on them is stressful for all parties involved. There’s no guarantee that you’ll always get your desired outcome. Here are 6 billing and collections tips you can use to make your business life easier.

Make the Payment Terms Clear in the Contract

Payment terms should be clear and concise, documented in writing, and signed by both the business and the client. The easiest way to do this is to make the payment terms part of the business contract. Ensure that you fully explain the expectations of the client in regard to when payments are due, how payments can be made, how late payments are handled, and what happens if a bill goes. Detail collection efforts, late charges, interest, and fees so there are no questions about what will happen if a payment is not made on time, or at all. Pro tip: Make sure that you’re not violating your state’s laws for late fee amounts or interest charged.

Keep Your Invoices Consistent

One way to minimize the likelihood of an account going past due is to ensure that you’re sending out invoices when you should. Make sure that updating your billing is a daily part of your routine. If you don’t have time to do that, get billing help. Daily billing can help make sure that invoices are prepared at the right time and that they’re ready to be sent out. For up-to-date clients, an invoice provides pertinent information including the due date, payment amount, how the client may pay, how many days the account may be past due, etc.

However, if payments aren’t made as agreed, you’ll have to engage in collections. This is a much easier process when you have a history of consistently creating and sending invoices because you’ll have all of the information you need to review the account before engaging in collections. This will also make it easier for you if you decide to partner with a collections agency.

Clients who have delinquent accounts have the legal right to ask for validation of the debt. This is often done by providing a copy of the contract or other proof of an existing business relationship. Providing copies of invoices allows the client to refresh their memory related to the account.

Also, make sure your business contact information is clear and easy to find on all invoices. This guarantees the client knows who the invoice is from and how to contact you if they have any questions.

Follow-Up on Invoices

If the client doesn’t pay on or before their due date, it’s time to follow-up. Give them a call and ask if they received their invoice. If you send out electronic invoices, ask them to check their inbox and their spam. It could just be that they lost track of time and forgot it was due. It could be that they’ve ran into financial problems. It could be that they have questions about their bill. The only way for you to know what’s happening is to ask.

Following-up can help you get paid faster or alert you to problems that are much easier to solve when they first happen than months later.

Keep Detailed Payment Histories

If your collection efforts have been less than successful, it’s time to consider partnering with a collection agency. Providing them with a detailed payment history for each delinquent client can be very helpful. Compared to rebuilding a payment history after the fact, taking time each day or week to ensure that all payments are applied and that payment histories are accurate is a huge time saver. By keeping and providing these payment histories to the collection agency, they can do their job better and get you paid faster.

In the End…

In the worst-case scenario, you may need to take the client to court. Using your original contract, copies of invoices, and a detailed payment history can help build your case against the client. You are more likely to be granted a judgment by the court.

Clients ARM Collections

Clients ARM has years of experience in first- and third- party collections. We can help with billing and move smoothly into collections, if needed, on your behalf. We offer a free consultation and would love to show you how we can help with your collection efforts. Call us today!