What Are the Best Tips for Collecting Accounts Receivable?

A company’s accounts receivable refers to the outstanding funds that are due to that company from customers or clients for products or goods that may have been purchased, or for services that may have been performed for which it is yet to receive payment from the customer. Many companies find themselves at a loss when it comes to the collection of debt from their customers due to a number of factors that include fear of losing the business of a customer and general inefficiency in the recovery of such funds. The truth is that companies must be more proactive and assertive in their debt collection and recovery efforts, because such funds are the life-blood of the business without which it might experience a serious cash shortage that will negatively affect its business activities. Methods used for collecting accounts receivable by such businesses are mainly a combination of efforts aimed at ensuring that they attain the money without unnecessarily antagonizing or alienating their customers.

The truth is that almost all businesses that apply some form of credit in their business transactions with customers and clients will experience a percentage of tardiness in the payment of the money owed, while some funds might not be recovered at all. In most cases, all that customers need are prompts in the form of emails or physical mail, in conjunction with phone calls to remind them of the outstanding funds that they owe the business. Most companies start off by reminding the customers of such debt and assuring customers that they know they probably forgot, while also giving them several options for the payment of the funds. This method of collecting accounts receivable is smart in that it is both assertive and conciliatory — two terms that sound opposite but work together since the tone of the message is not confrontational and gives the customer a chance to pay by credit, check or any other defined form.

Such a method of collecting accounts receivable means businesses must have several options through which they can receive money from their customers so that there will not be any need for insisting on one form of payment. When this method of collecting accounts receivable fails after several attempts to collect the payment, the business will have to resort to tougher measures. This might include letters warning the customer that the accounts will be sent to collection within a specified time frame.