Business professionals understand the inevitability of a customer not paying their bills in a timely manner, if at all. Many companies in a B2B dynamic take the route of having their own internal collection mechanisms for those who have fallen past due in their financial obligations. The numerous benefits include avoiding splitting funds with collection agencies at the top of the list.
Many past-due accounts are the result of overwhelmed business operations with multiple invoices that require payment at specified deadlines. Yet, a forgotten invoice still needs to be paid in full, even if the client claims that money is unavailable due to non-payment from their customers.
Employing formal policies
Internal strategies customized to the particular business can be an effective strategy that preserves ongoing cash flow without gaps. While a handful of clients shouldn’t affect a healthy bottom line, the problem can affect an enterprise’s future over time. The objective is to thread the needle that results in securing past-due money owed while maintaining a satisfied customer base.
The invoices sent out may require periodic reviews that are confusing and lack the following:
- Itemized list of services connected to specific prices with accurate totals
- Specific invoice numbers used for tracking statuses
- Missing payment terms, due dates, and acceptable payment methods
Implementing technology to replace Word and Excel templates provides a sense of consistency and time savings while avoiding the “human error” factor. In addition, automation can track interactions with clients, the status of payments, and scheduled follow-ups.
Effective invoice delivery and ease of payments can significantly impact a bottom line. While delivery via email is common, past-due bills may require a more direct approach, specifically a set time for past-due communications that make it difficult for debtors to ignore.