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Rule 10
Nobody Collects Every Account
• Even with a good billing and collection policy, a few accounts will never be collected
• A consistent collection process will diminish the number of slow and non pay accounts, and that’s a victory in itself!
I hope this information in this blog is helpful to any business that is stressing over uncollected accounts.
Please contact me if you I can be of assistance to you with your accounts receivable issues.
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Rule 8
Follow the Collection Laws in Your State
• No public advertising of the debt
• No calling at odd hours, DO NOT make threats, etc
There are also Federal regulations regarding collection practices. Make sure you are educated.
If you need more information about the collection laws in your state you can contact me or go to your states web site.
Your best bet though, is to consult your attorney.
More To Come... Contact Me
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 Rule 7
Admit and Correct Any Mistakes On Your Part
• Customers realize that “to err is human”
• They will appreciate prompt and courteous action when an oversight is caught
• Beware: Do not try and cover up mistakes!
More To Come... Contact Me
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 Rule 5
Contact Overdue Accounts More Frequently
Contact late accounts every 10-15 days.
Rule 6
Make Sure Your Staff Is Trained
• Even experienced staff members can become jaded
• Being Firm but courteous is the key
• Your staff must “sell” the concept to clients that they should pay what is owed
Collecting by Phone
• Goal: Payment in full with 1 call
• Track days and times of calls and take notes on each conversation
• Getting past the gatekeeper
• Set goals of the number of calls
• Mental Attitude – expect success!
• Ask for payment TODAY (credit cards)
If you don't accept credit card, consider it.
Positive vs. Negative Communications
Positive - I know you expected quality work delivered on time…
Positive - I know you have responsibilities as we all do…
Negative - This will cost you more if I have to take further action…
Negative - I don’t care about your problems…
How to Ask For Money
Asking For Money is a 3-Step Process
1. Step One – Sympathize
Show compassion, “I know how that happens sometimes”This diffuses any possible anger and catches them off guard.
2. Step Two – Restate the Obligation
“Mr. Smith, your account was due on m/d/y.”
This should cause some guilt on their behalf as well as have them realize you are “right” in asking to be paid.
3. Step Three – “How Much Are You Short?”
“Mr. Smith, of the $200 that is due, how much are you short?”
a. If they can pay some now, then give a finite time to pay the balance.
b. If they are short the whole amount, you are still in control of payment terms.
What Not To Ask
· How much can you pay?
· When can you pay?
· Can you pay something?
Note: This gives control of the conversation to the debtor, enabling them to give unreasonable answers for non-payment
More to come... Contact me
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 Rule 4
Use Your Aging Report, Not Your Feelings!
Many business owners and managers feel they will lose customers if they push too hard for payment or request payment to early (i.e. net 10 days instead of 30 days). This is simply not the case.
As a business owner, you cannot let fear of lost business determine how you run your business billing. You work hard to provide a good service or product in a timely fashion to your customers or patients. So why shouldn’t they compensate you in timely fashion?
Be diplomatic, but be persistent. Persistence does pay off!
Tip: Use colored paper for past-due notices
More To Come...
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 Rule 3
Use “Address Service Requested” now called “Address Change Service” that is available from the USPS.
The Postal Service will research addresses of “mail skips” or undeliverable addresses and for a small cost they will forward the mail and in return send you a post card with the most current address on file. There are also electronic options as well.
This is an easy and effective way to keep your address file up to date and make sure your invoices and statement are getting delivered.
More to Come... Contact Me
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 Rule 2
Invoice Promptly and Send Statements Regularly.
If you want to be paid timely you have to invoice promptly.
If you don’t have a systematic billing system, get one!
If you don't know how to create one,
please contact me.
Consider using a billing service for invoicing or a service like GreenFlag Profit Recovery for following up with your invoices especially if you don’t have time to do it yourself.
More To Come...
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 · Businesses do not always get paid for the
service or product they provide.
· The following steps are critical to reduce this
CASH FLOW KILLING problem.
Top 10 Ways to Improve Collections
Rule 1
· Have a Defined Credit Collection Policy
· Clearly state your terms of payment in writing for every customer.
Establish Written Internal Collection Procedures
· Easier when training new employees
· Demonstrates importance placed on collections
· Establishes performance benchmarks
· Review and update as needed
· Keep it clear and simple
Defining a Collection Policy
· Define “past-due”
· Define acceptable payment arrangements
· How many written notices?
· How many phone calls?
· How is returned mail handled?
· Do you make personal visits?
More to Come… Contact Me
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 Some business owners actually can create their own accounts receivable nightmare by not subscribing to the best billing practices. Many don’t, for the simple reason; they don’t know what they are. Having a good understanding of these practices and implementing them can go along way to avoiding non-paying or slow-paying customers or patients in the first place.
Many business owners feel they will lose business if they push too hard for payment or request payment to early (i.e. net 10 days instead of 30 days). This is simply not the case. As a business owner, you cannot let fear of lost business determine how you run your business billing. You work hard to provide a good service or product in a timely fashion to your customers or patients. So why shouldn’t they compensate you in timely fashion?
Think of it this way, if your customer or patients are not paying you for the services you've already provided in good faith, then are they really a good customer to have? Do you think if you used their service or products that they wouldn’t want to be paid timely? You bet they would. They are in the business to make a living just like you.
Best Practices Start at the Sale
1. Written Agreements
2. Payment Terms Defined
3. Possible Penalties for Violations
What to include on an Invoice
1. A clear invoice number and request it on check
2. A specific due date
3. Details including the date of service, the case, time spent, copies provided along with corresponding rates
4. Acceptable forms of payment
5. Your phone number and address
6. No. 30, 60, 90, 120 day boxes
Follow-up Early
1. Be the “Squeaky Wheel”
2. Written requests for payment including due date and acceptable payment terms
3. Remind and thank them for earlier commitment
4. Attach copies of earlier commitment
More to come… VIEW MY PROFILE  
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