Collecting accounts receivable is no easy task; it takes a combination of organization, persistence, patience, and the ability to be firm without being offensive. Every communication you send to your customers either gets you closer to or further away from being paid depending on the content of your communications.
True, accounts receivable collection automation software makes collecting accounts receivable much easier, but you should be periodically analyzing to see if everything is still working. Every once in a while you will want to check in and make sure your automated communications are in line with your accounts receivable collection strategies and goals.
A solid accounts receivable communication will cover quite a few different topics; below is a list of factors to consider while drafting your emails, letters, faxes, etc. to help you find success in collecting accounts receivable.
- Always include the name of the customer, address, invoice date, amount due, and description of the product purchases of services delivered.
- When possible address the communications to a specific person, not just a company
- Mention the fact that the customer accepted the responsibility to pay when they signed for or ordered the product/service.
- Never imply that the invoice was deliberately ignored by the customer- give them the benefit of the doubt with phrases such as “overlooked invoice”, “prior communications not given to you” or other statements that give the customer the option to save face.
- Use an urgent tone that indicates the need for this issue to be resolved but be careful you do not push too hard until that becomes necessary
- If your letters always look the same and like every other letter that comes across your customers desk or into their inbox, it will be that much easier for them to ignore it. By using different formats, font, etc. you can make your communication stand out from other letters and make your customer give it a closer look.
- Remind your customers of past promises made and that they agreed at the time of purchase to pay by a certain date.
- Set a limit for a reply to the letter telling the customer that you would like a response by a given date.
This checklist will get you well on your way to perfecting your communications and making collecting accounts receivable a little less painful. If you are looking for additional information on this topic the white paper below will give you 17 proven tactics for improving your AR collections processes.