Somerset Accountant On: A Smart Collections Strategy For Your Business

Somerset Accountant On: A Smart Collections Strategy For Your Business

February 9, 2012

How are things going for you? Is there something we can do to help your business fight off the February doldrums? Do let me know. One nice way to fight them off is to get an infusion of cash. But too many businesses rely on poorly-conceived collections practices, and end up with having to jeopardize relationships in order to actually be paid for their work.

Well, even though we’re pretty busy around here right now, I wanted to take a moment and help you address this issue. After all, it’s a problem which SHOULD prompt creative solutions–instead of the “same old, same old”.

So, read on…and let me know if you have questions! Applying Smart Marketing To Collections for Somerset Area BusinessesEspecially in this environment, many different types of Somerset area businesses are suffering from accumulated “past due” receivables. And it’s a problem which shouldn’t *just* be addressed by “normal means” (calling, pestering, etc.). However, you can actually change the way the game normally works. How?

Well, I suggest that you use similar tactics which WON the sale: discounts, premiums for advance or prompt payments and good old multi-step follow-up. If you do have (or ever develop) a receivables problem, you’ll need to take this same sort of aggressive action to clean it up.

“Preserving the relationship” with a client who can’t (or won’t–more likely) pay his bills is of little value, and left alone, collection problems tend to get worse, not better. Even large, long-established corporations can find themselves in trouble with their payables.

In that situation, you as creditor could wait years for your money and then recover only a percentage of it. So it’s important that you set into place a *system* for getting this done. Because one of the most important lessons that I’ve learned over my years in business is that trends rarely reverse themselves. Trends don’t change; people change trends. 

Waiting, procrastinating, delaying action on a negative situation simply means it won’t change. When you get that very first glimmer of something “not right” in your business, that’s the time to look closer and to take corrective action. Too many people spot the tip of a problem and choose to ignore it, feeling they’ve got enough to handle already, so why go looking for trouble? It’s a funny thing how closely-related failure and success are, and how failure is usually the womb of a subsequent success. And, how most business problems have marketing-related solutions. To be very simplistic, effective salesmanship solves most problems–including collections. So you need a bias for sales in every area of your business — even collections.

So, turn your marketing mind onto it. What incentives can you provide delinquent customers? How can you “cut through the clutter” so that YOU get paid (while other vendors wait … and wait)? Good headlines, conversational appeals, and multi-step follow-ups is a good place to start. But then, of course, even “starting” on this issue is the biggest step.A few basic ideas to get you started:

* Never treat the customer like they are a delinquent, until they are VERY delinquent (i.e. honey beats vinegar, in the beginning)

* Use a variety of media to reach out (phone, email, fax, discreet social media)

* Approach the issue as if a “mistake has been made” — rather than you haven’t been paid because of mal-intent

* Use different staff, if one staff member isn’t getting headway

I hope this helps. Your bottom line will thank you, if you take the action.