Most small businesses greet the collections process the same way they would greet a venomous snake in their kitchen. No one wants to deal with it until their life is at stake-or in this case their business. With some preparation and a little courage, you can charm the snake right out of your business. You may want to keep your records yourself, hire a third party or invest in a software program.
To get started, consider these important questions:
How will I keep track of overdue accounts?
There are a number of bookkeeping software programs on the market that will help keep track of customers (each with different terms) buying on credit throughout the month. You can also create a report by hand, but manually keeping records of this magnitude may be a liability to your business when software programs are cheap and userfriendly.
How often should I review my accounts?
Exercise some flexibility. You may want to review some accounts that are 30 days overdue on the 35th day and some on the 40th day. Doing this will prevent 40 files one day and none the next. This is also a task that can be handed to a team member to do.
How do I verify that the accounts on my report are still overdue?
You will need to coordinate your account files with the record keeping system that tracks your sales and payments-whether it is a ledger or a software program.
To discuss any of these ideas or for assistance implementing an organized collections process, please feel free to contact us. We will be happy to assist you.