Rule1, He who expects to get paid, gets paid
In the administration and control of receivables, attitude counts. We have discovered that if you expect to get paid and the other party knows it and knows you will take action if you are not paid, you will get paid.
It’s simple, if you take it seriously, they will take it seriously. On the other hand, if you treat receivables lightly and allow your customers to take advantage of you, they will. What does “taking it seriously” mean?
• Establishing policies and procedures that will help you make decisions faster and easier.
• Making a commitment to properly train yourself and your employees in how to manage and collect receivables.
• Being certain your customers understand your terms & intentions.
• Understanding and using the tolls and services that are available to you.
We invite you to take a closer look at how your company handles its receivables. Ask yourself if you are taking the task seriously enough or is an attitude a adjustment required?
Rule 2, Do something every twenty days
Nothing is more effective than a systematic, controlled approach to collection. Step-by-step procedures are the key.
We have had a great results with a process we call the “Twenty Day Diary”.
Here’s how it works:
• Day one, you make a sale, deliver the product and issue an invoice with terms set at Net 30 days.
• Twenty days later – ten days before the receivable is due – you call the customer. This is a pre-collection call that doubles as a service call.
• You ask if the order was received, if everything was satisfactory, if they have the invoice and if they understand the terms.
• I there is a problem, you have a chance to fix it before the due date and everybody is happy. If there is no problem, you know the customer is satisfied and is likely to pay on time and the customer knows you care.
• The next call (if necessary) is then scheduled for twenty days after that – 10 days after the date. If a genuine problem has risen, it’s early enough to deal with it efficiently. But if you are being stalled. you will know that too and you can act accordingly.
The secret is to be systematic and organised. We call it the “Twenty-Day Diary” because to make it work, you have to keep track. Write down what was said. when, by whom, every step of the way and you can’t go wrong.