How to Deal with Past Due Accounts Without Losing Your Mind
One of the most common reasons why business owners reach out to Clients ARM is because they need help dealing with past due accounts. The business owner is stressed out because they are struggling with collecting. Clients ARM provides both first party and third party collections services. We make the process quick and easy. Since many business owners often want to try and handle past due accounts, we’re going to walk you through how to deal with them without losing your mind.
Recognize That All Businesses Have Past Due Accounts
When you own a small business, it can feel like a personal insult if someone who owes you money doesn’t pay. You might wonder if you did something to the client to somehow upset them. One thing that many business owners don’t recognize when they have past due accounts is that it happens to every business. All businesses have at least one past due account. If you haven’t dealt with a client who hasn’t paid their invoice yet, you will. While it is true that a client may not pay their invoice because they are upset or have questions, it’s not necessarily a personal matter. Do not take past due accounts at a personal level.
Put Safeguards in Place to Minimize Past Due Accounts
Just because past due accounts happen to every business doesn’t mean that you can’t minimize how often it happens. Putting safeguards in place keeps you sane because you know that you’re dealing with the bare minimum of what could have happened. Safeguards include:
- Create a solid credit policy. You must be careful not to give clients too much credit. It can create a breeding ground for past due accounts. Clients may be no longer able to afford their invoice.
- Make sure that clients know and understand your billing policy. It should be in simple writing and available to your clients. They should know who they can call with any questions.
- Send out invoices at the same time each month. When clients know when to expect their invoices, they are more likely to pay.
- Make paying the invoice easy. You should consider online payment methods.
Follow-up Is Key
Follow-up isn’t just about calling once an account is 90 days past due and you’ve started collections. Follow-up is key to preventing the need for it. If you’ve noticed that a client has paid their invoices late a few times, call them. Ask if it would be helpful if you moved the due date. Maybe they’ve changed jobs. Maybe the due date was never convenient for them. It’s a small change to make if it means that clients do not have past due accounts.
If you have a client that hasn’t paid their account and it is getting close to the end of a grace period, follow-up with them. Maybe they’ve had an emergency. Maybe they lost their invoice. Maybe they have financial hardships. You can’t help them if you don’t know what’s happening. The only way you can know what is happening is if you follow-up.
When you follow-up, you have the power to remain the problem solver. Helping your client through a difficulty means you’re more likely to get paid and you protect your reputation.
Choose a Collections Agency with a Good Track Record
If you decide that you need the help of a collections agency, choose one with a good track record. This is important because regardless of whether it is first or third party, this company will be seen by the client as an extension of your company. Any bad behavior on the part of the collections agent will be directly reflected onto your business. Additionally, if the collections agency doesn’t adhere to federal or state law, your company could end up in hot water.
Clients ARM has a recovery rate that is better than 90%. We pride ourselves in using good old fashioned customer service when we are collecting on past due accounts. To learn how we can help you, give us a call and schedule your free consultation with our CEO.
One of the most common reasons why business owners reach out to Clients ARM is because they need help dealing with past due accounts. The business owner is stressed out because they are struggling with collecting. Clients ARM provides both first party and third party collections services. We make the process quick and easy. Since many business owners often want to try and handle past due accounts, we’re going to walk you through how to deal with them without losing your mind.
Recognize That All Businesses Have Past Due Accounts
When you own a small business, it can feel like a personal insult if someone who owes you money doesn’t pay. You might wonder if you did something to the client to somehow upset them. One thing that many business owners don’t recognize when they have past due accounts is that it happens to every business. All businesses have at least one past due account. If you haven’t dealt with a client who hasn’t paid their invoice yet, you will. While it is true that a client may not pay their invoice because they are upset or have questions, it’s not necessarily a personal matter. Do not take past due accounts at a personal level.
Put Safeguards in Place to Minimize Past Due Accounts
Just because past due accounts happen to every business doesn’t mean that you can’t minimize how often it happens. Putting safeguards in place keeps you sane because you know that you’re dealing with the bare minimum of what could have happened. Safeguards include:
- Create a solid credit policy. You must be careful not to give clients too much credit. It can create a breeding ground for past due accounts. Clients may be no longer able to afford their invoice.
- Make sure that clients know and understand your billing policy. It should be in simple writing and available to your clients. They should know who they can call with any questions.
- Send out invoices at the same time each month. When clients know when to expect their invoices, they are more likely to pay.
- Make paying the invoice easy. You should consider online payment methods.
Follow-up Is Key
Follow-up isn’t just about calling once an account is 90 days past due and you’ve started collections. Follow-up is key to preventing the need for it. If you’ve noticed that a client has paid their invoices late a few times, call them. Ask if it would be helpful if you moved the due date. Maybe they’ve changed jobs. Maybe the due date was never convenient for them. It’s a small change to make if it means that clients do not have past due accounts.
If you have a client that hasn’t paid their account and it is getting close to the end of a grace period, follow-up with them. Maybe they’ve had an emergency. Maybe they lost their invoice. Maybe they have financial hardships. You can’t help them if you don’t know what’s happening. The only way you can know what is happening is if you follow-up.
When you follow-up, you have the power to remain the problem solver. Helping your client through a difficulty means you’re more likely to get paid and you protect your reputation.
Choose a Collections Agency with a Good Track Record
If you decide that you need the help of a collections agency, choose one with a good track record. This is important because regardless of whether it is first or third party, this company will be seen by the client as an extension of your company. Any bad behavior on the part of the collections agent will be directly reflected onto your business. Additionally, if the collections agency doesn’t adhere to federal or state law, your company could end up in hot water.
Clients ARM has a recovery rate that is better than 90%. We pride ourselves in using good old fashioned customer service when we are collecting on past due accounts. To learn how we can help you, give us a call and schedule your free consultation with our CEO.
