![]() To avoid being caught off guard by collections, your organisation should regularly review late payments so that the AR management team and other executives stay updated on the status of receivables. If these efforts do not result in the payment being received, it may be necessary to escalate the situation to an account manager or sales team member for further action. If two emails do not yield a response, a team member should make a phone call to the account one month after the payment is due, informing them of the delinquency. Since it’s safe to assume that at least some of your customers won’t pay on time, your AR management policies should incorporate a comprehensive plan outlining how your accounting team should address late payments.įor instance, your policy could direct the AR team to email accounts with overdue payments one week after the due date and again the following week if no payment is received. Determine standard procedures for following up on late payments ![]() The more convenient the payment process, the quicker you'll receive your payments.Ĥ. Accommodate as many payment options as reasonably possible. For example, instead of only accepting checks via mail, consider implementing an online payment portal that’s available 24/7. The more options you give them, the more likely they will pay their invoices on time. Offer your customers multiple payment options. You might not convince all your customers to take advantage of the early payment discount, but you will almost certainly convince some of them. Otherwise, the full amount of the invoice is due within 30 days. For example, you might add the terms “3/10 n/30” to your invoices to give customers who pay within ten days a 3% discount. Offer discounts for early payment of invoicesĬonsider offering your customers a discount if they pay invoices early. If the policy is clear, employees won’t feel bad having to deny credit to certain customers - and customers who get denied won’t feel that they’re being unfairly treated.Ģ. Most successful companies have well-defined credit policies that specify the types of customers eligible for net terms and those required to settle their accounts in full immediately.īy establishing a credit policy and ensuring your employees and customers are aware of it, you can decrease the chances of giving credit to customers who are unlikely to repay.
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