Cash Management Secrets

Proven cash management strategies that improve cash flow, collect past due money, and increases profits in tight credit markets.

Handling Late Business Accounts That Lie

It is bound to happen in today's economy, a customer requests an extension. They are willing to talk with you, never avoiding your calls, but you still never see the check. Why is it that so many late pay accounts lie?

These accounts lie to you because they are trying to buy time. Sincerely, they mean to pay you, they just don't have the money or resources to pay right now. They are shifting their financial problem to you.

Very often these are previously good customers, so you may not want to send them to collections immediately. The first thing you can do is get them on a payment plan, suspend their account and get them paying something.

By using a "fixed in writing" payment plan, you reduce the amount of costs associated with managing their account while getting something for your time. If the customer can't make a payment, they are a risk and you have additional documentation to pursue the account.

Let customers make payment by credit card, direct bank transfer, or other means to get the money fast. You want them automated in a system, rather than having to call each week. Keep copies of their checks, credit card information, or banking details in case you need it later.

The best thing you can do for a customer on the other end is help them get to the truth. Work with them to the extent you get a payment, but at the point they confide they can't pay, then work to minimize your losses. Fortunately most companies bring their accounts current on payment and everyone is happy (especially your bank account.)

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Cash Management Secrets provides tools for increasing business cash flow and collecting overdue accounts. Read more at http://CashManagementSecrets.com/

Posted by Justin Hitt on September 8, 2008 8:05 AM | Permalink

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