No matter how good you are at screening new customers for credit worthiness, and monitoring the financial health of existing customers; there will be some accounts that become delinquent. The economy goes down as well as up. Markets change for the worse. Even the best customers can have cash flow problems. You need to be prepared to collect accounts when they become past due. Here are 6 tips for dealing with delinquent customers.
COLLECTION POLICY AND PROCEDURES
No matter how good you are at screening new customers for credit worthiness, and monitoring the financial health of existing customers; there will be some accounts that become delinquent. The economy goes down as well as up. Markets change for the worse. Even the best customers can have cash flow problems. You need to be prepared to collect accounts when they become past due. Here are 6 tips for dealing with delinquent customers.
FRIENDLY BUT FIRM
Delinquent customers should be handled in the same friendly, courteous manner that you would treat any customer. Remember that without customers you have no business. Customers can be very hard to win and retain. Don’t alienate them with the way you handle past due invoices.
The key to handling delinquent accounts is to be friendly, but firm. Follow your collection policy and procedures in a courteous, business-like manner. Be careful not to become emotionally involved with a customer’s problems. You can be sympathetic, but stick with your collection policy and procedures.
ONLINE PAYMENT OPTIONS
Make it easy for your delinquent customers to pay past due invoices. Offer online payment options by including a hyper-link on your invoice template connected with a secure payment portal.
The portal could accept payments by credit card, Automated Clearing House (ACH), and Electronic Funds Transfer (EFT) among others. Customers have no excuse to delay payment until a check can be cut and mailed when you offer online payment options.
AUTOMATED REMINDERS
An automated accounts receivable, credit and collection system can make it easy to send copies of invoices, account statements and collection letters to delinquent accounts. Using automated reminders leaves you more time to make personal contact with delinquent customers. More frequent contact can increase your chances of being paid sooner or at all.
CUSTOMER DISPUTES
Customer disputes are a major reason for delinquent payments. Missing documents and miscommunications are frequently the cause of customer disputes. Quick resolution of disputes is essential to clearing up delinquent accounts.
PAYMENT PLANS
Include the ability to structure payment plans in your collection policy and procedures. This is particularly important with delinquent customers that want to keep doing business with you, and customers that are important to your business. Working out a plan to accept payments on past due invoices while the delinquent customer keeps new invoices current, can be a win-win situation for your business and the customer under the right circumstances.
You should be more successful dealing with delinquent customers if you follow these 6 tips. The tools available in an automated accounts receivable, credit and collection system can also make collecting delinquent accounts easier and more efficient.
Automated accounts receivable, credit and collection software is available from Lockstep Collect, the leader in cloud based software solutions made specifically for businesses selling on credit terms.
If you would like to learn how you can automate your accounts receivable, credit and collection system, please contact Lockstep Collect at www.lockstep.io.
