If you extend credit terms to business customers you’ll inevitably end up with plenty of reasons why customers can’t or won’t pay you on time, but there are a number of things you can do to cut down on the amount of disputes your A/R collections team deals with.
Any and all customer communication should be friendly in nature. Take the standpoint that the customer is innocent until proven guilty. Even if it’s their fault, kill them with kindness, and they’ll know that you’re there to work with them to resolve the issue. It takes a long time to convert a prospect to a customer, and most customers are good customers – especially when you build a mutually-beneficial relationship with them.
It’s your job as a credit and collection professional to ensure that your business is paid in a timely manner for the quality products or services you provide. You extend business credit terms as a benefit to your customers, and you deserve to be paid when you fulfill your obligation, by shipping the product or completing the service.
The key to resolving invoice disputes is to identify the dispute very early in the collections process. Too often businesses send out invoices, and they wait until the invoice is severely past due before they start calling to find out why they haven’t been paid.
There are basically two fundamental reasons why a customer hasn’t paid you on time. It’s either your fault that you did something (or didn’t do something) preventing them from paying you, or it’s something that they’ve done (or didn’t do) that is beyond your control.
In the majority of cases, the blame is solely on your business, and there are things you can do to avoid invoice disputes from ever happening. There are strategies that you can use to effectively resolve invoice disputes in the rare case that you’ve done everything right, and the customer is at fault.