As per the recent research which shows us, over 30 percent of mid-range businesses globally have the same facing issue with their income unit because of the late or pending payments. Having a well-managed strategic plan in your account receivable management system will facilitate your determination of the pace and timings to gather on the unpaid invoices and ignore which aren’t to be done. Every small detail gets changed on every step supporting the invoice duration overdue period from frequency, tone, and methods of communication to contact the customer.
Let’s discuss the 6 stages workflow to improve accounts receivable collection at each step:
-
During invoice generation:
If we look at the recommendation of the previous studies as well as the experts, it all says that the best time to collect the payment is while you are generating the invoice only. And once you proceed with this method, you will see that the payment starts coming in right on schedule and there is no further delay to be noticed from the end of your customers. It makes life easier for the customer as well since the invoice payments now come with more efficiency and pace along with a further better communication setup right from the moment of purchase. This all can be made possible with the integration of automated account receivable software with your current ERP system.
At the time of making the invoice confirm the payment terms which include the day of the month and payment methods you accept are mentioned.
-
Before maturity date:
Sending a proactive reminder to the client before the invoice is due could be a good professional move you’ll be able to take. Ensure you’re putting a reminder for you and every one of the team members well before the maturity (preferably one week to 10 days) for sending the invoice again, together with a friendly reminder that mentions their day of the month and every one the payment terms. Ensure that there’s a link attached with it for the web payment gateway or steps which can instruct them to transfer the balance they own and you’re happily willing to simply accept the payment now if they might wish to get on with other important tasks of their to-do list.
-
During maturity date:
If you would like to receive the payment on time you shouldn’t miss any opportunity. If your clients or customers are awake to your practice of routine follow up for payments, they’ll become habitual of getting reminders for any reasonably late payment which they require to avoid and pay-on time. This is often an excellent deal for your business. Just confirm to re-send them a replica of the invoice together with a nudge of reminder for a late fee if the payment isn’t done time, there are various account receivable software available which might facilitate your try this efficiently.
-
Every week:
If the day of the month reminder sent by you gets no response from the customer and it’s already every week past the day of the month then it’s time to send a reminder all over again. You can make it easier by automating the invoice process. But now around, you may be including yet another method of communication with them which is to relinquish them a call. If your customer has provided you with their number previously you’ll be able to attempt to call them, drop a text message which is additionally a good way of communicating important information regarding the missed payment, but ensure you’re not overdoing it.
-
After a month:
The moment the invoice crosses a month past the due mark, the approach to receive the payment demands aggression in a calculated manner. Start by calling the customer and take a look at to induce a firm commitment over the following date where they’ll get the payment done and make sure to say the implications if they fail to fulfill them. After the decision and chatting with the customer is done, confirm it’s followed up by an email that carries out all the data outlined regarding the pending payment and also the conversation with a record of it. Ask them to reply to the mail with their acknowledgment once they need receiving after agreeing to all or any of the terms.
-
After two months:
Once the financial obligation shows that the invoice crosses the monthly mark overdue, you’ll be able to provide a follow-up reminder once each day which has late payment notice and every one the possible consequences. Ensure the tone of your delivery of the text or email is firm/strict but not rude/threatening. After it crosses the three months channel, the simplest action during this scenario to-do is just sending it to the collections.
