The most effective way to increase the success of your collection efforts is by forming and executing a systematic, consistent, and controlled communications plan. How often are you connecting with customers today? Many companies send an invoice and do nothing until the invoice is late and then they start playing catch-up. That reactive approach breeds stacks of unpaid invoices. At the same time, it’s understandable that you don’t want to contact your customers too frequently and make them feel like they are being harassed or dirve them away. Below is a schedule that will help you send the right message at the right time to make you more effective without driving your customers crazy!
The table below provides a suggested timeline for credit and collections actions for each of the three primary types of customer accounts – strategic, established, and new customers. The table is organized in sequential order as the invoice ages. Large disputes and large and medium invoice definitions will vary by company. The numeric values under each type of customer represent the number of days from the invoice due date that the action should occur, assuming Net30 terms. Some actions such as identifying invoice problems and sending reminders will occur before the invoice due date (represented by a negative numeric value).
Developing the emails and gathering the information to make the phone calls listed above can be time consuming if you rely on manual process, emails, and spreadsheets. By utilizing accounts receivable management software, you can triple your efficiency and focus on resolving disputes and making phone calls, not typing emails or digging up account information.
Accounts receivable management software will help you easily automate the entire process and will automatically send reminders and notifications when the invoice is created, as the due date approaches, when the invoice it past due, and even a thank you note once the payment has been received. For each of those automated communications, you can set the rules that define when they are sent to specific customers and utilize customizable templates to support your brand and strategy. Communications is just one of the many activities accounts receivable management software can automate for you, learn more here.