Get Paid! Tips for Collecting Those Receivables
It can be uncomfortable being your own collection agent, especially in a local small business environment. But remember, those receivables are your paycheck, so here are some tips for getting paid faster.
Offer Online Payment
Everything is online nowadays. Think about it – how many checks do you actually mail out each month? QB has a payment solution that links right in, so when you email your invoices it has a “pay now” link. Even if not the QB one, any form of online payment usually speeds up the collection process.
Accept Credit Cards
Yes, there is a fee associated with that. But would you rather collect 97% of what is owed, or 0%? The point is, taking credit cards and offering online payments makes it easier for people to pay you. You want to remove as many obstacles between you and your money as possible, such as customer ran out of stamps or doesn’t have their checkbook handy.
Change Delivery Method
If you normally email your invoices, try mailing it. It’s very easy to miss an email, but good old-fashioned snail mail puts it right into the customer’s hand. Or, if you normally mail, try emailing and ask for confirmation. Point here is to be sure the customer is at least receiving the invoice.
Charge Late Fees
First, make this part of your fee structure (tell customers up front when you’re quoting). Assessing even a small late charge can do the trick; people hate paying fees. You can waive the fee if you’d like, but at least you got your money.
So these are some ways to keep on top of your receivables. Don’t be afraid to pursue outstanding balances. You did the work/sold the products, you deserve to be paid!
If all else fails, and the outstanding balance is worth it, you may consider bringing the customer to small claims court. And if you end up never collecting the money, you want to write off the invoice to bad debt. But hopefully by following these tips you won’t need either of these options.