Having a large number of accounts doesn’t mean your company is making money if those accounts aren’t being paid. Your account receivable management helps ensure customers continue to pay your company in a timely and orderly manner. Here are three tips to help the department proactively manage collections.
Tailor Credit Limits to Each Customer
Your account receivable management department sets credit limits. Each consumer doesn’t need to get the same trade credit. They should be tailored to match the customer’s status. A new customer, for example, doesn’t deserve some of the terms extended to mature customers who have exhibited good habits. Reward repeat, loyal consumers by offering more lenient terms. By starting new customers off with smaller trade credits, you can observe their behaviors first before trusting them with more.
Be Creative
Collection departments may need to think outside the box to get some consumers to pay. Offer incentives or installment plans. Installment plans may mean you get some payment instead of none. The process allows consumers more flexibility. Incentives, such as penalties, interest or discounts, can encourage good paying habits also.
Friendly Reminders
Some customers need to be reminded to pay until they do. That’s the responsibility of account receivable management teams. A friendly email or text can remind them of deadlines, as well as payment methods. Customers are busy too so give them the benefit of the doubt. They forget. Set up friendly alerts so they pay closer to their deadlines more frequently.
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