Tips on controlling receivables

Although I have already discussed this topic over my previous columns, I have came across with this very interesting piece written by Mr. David Balovich, founder of Business Education Services a credit consulting and training firm, headquartered outside of Dallas, Texas. According to David Balovich in his article entitled: Improve Collection Through Change, "unless we begin to identify what is not working and make changes then everything will stay as it was and collections will continue to be our problem". Below are some tips, he mentioned that could improve and control accounts receivables.

Don't Ship Large Orders From Customers Unless They Have Good Credit. Break down large orders into smaller shipments with terms that require the last shipped order to be paid before the next order is released. By doing so, you only have to be concerned with collecting the last order with a small dollar balance instead of a large order with a high dollar amount.

Don't Release New Orders For Customers With Past Due Balances. As simple as this seems many past due balances exist on customer accounts because the customer has promised to pay for past due invoices if new orders were released. Inform the past due customer that upon receipt of their past due payment their new orders will be released. If it's really important to the customer they will make the effort to get us the money immediately; overnight delivery, wire transfer or if we accept them, credit card payment.

Do Not Provide Customers Reasons Not To Pay Your Bills. Identify and resolve disputes as quickly as possible. If a customer is disputing a portion of the invoice insist that the undisputed amount be paid according to terms.

Follow Up Promptly. Never wait more than 10 days from the invoice due date to contact the customer for payment. The old adage about the squeaky wheel getting oiled first is still prevalent today. Also, return customer phone calls the same day they are received and if possible avoid allowing customer calls to be routed to voice mail. Customers respond, pay their bills, favorably when they are given prompt attention.

Lastly, the author also emphasized that if we made follow-ups, we must "remain calm, attentive and friendly. Never lose your composure or professionalism if the customer becomes upset or unpleasant. Never argue with the customer. Never leave the customer believing we are going to do something we can't or have no intention of doing".

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Editor's Note: Mr. Ed F. Limtingco, is the VisMin Manager of CIBI Information, Inc., a business information and receivables management company. He can be reached at 0917-7220521 or at [email protected]