How You Manage Accounts Receivable Can Make or Break Customer Relationships

Asking for money can be uncomfortable, but it’s a part of doing business. No matter how much you may be afraid that asking for payment will negatively impact your relationship with a customer, it won’t happen as long as you do it correctly. Your customers will not get upset and leave your company because you asked for payment for products/services provided, they know they owe you. The topic itself won’t result in bad blood, but the way you handle the conversation might. Remember, accounts receivable management is just as much a customer service function as it is an accounting function. Here are a few things you should and should do when communicating with your customers about payment.

Do:

  • Be polite and respectful at all times.
  • Follow-up regularly.
  • Ask if there is a problem preventing them from payment- how can you help?
  • Double check that they have all of the correct invoice information.
  • Listen to your customers explain why the payment has not been made. Have a conversation.
  • Remind them of any promises they have made in the past.
  • Admit error and apologize if delayed payment is caused by a mistake on your company’s part and do what you can to fix it.
  • Take notes after the call on what was discussed and save them.
  • Send a follow up email recapping the phone call and plans for next steps with a copy of the invoice in question attached to the email.

Do not:

  • Raise your voice.
  • Threaten them with legal action (legal action may be required, but not until late in the process and it should not be stated as a threat, be matter-of-fact).
  • React to any attitude of or negativity they might express.
  • Accept “the check is in the mail” without asking questions such as:
    • When was it sent?
    • What is the check number?
    • Where was it sent?
    • Etc.

As long as you remain calm and professional, no ill-will should come from your collections communications. It should do just the opposite! Accounts receivable is the last contact your company has with a customer, the last service you provide; make it a positive one so they will come back again.

To make the communications process faster, more complete, and less awkward, try developing email/letter templates and call scripts. This will cut down on the time spent writing up letters so you can focus on other tasks and ensure you cover all of your bases for the most effective communication.  A call script can do the same and help cut down on the awkwardness of asking for money and dealing with customer responses.  Developing those templates can take a bit of time up front, but we’ve gotten you started. Download our library of collections communications template and personalize them for your business.

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