The Most Overlooked Aspect of Your Company and Why It May Be Stealing Your Profits
by Michael S Fink| May 13, 2013
Copyright (c) 2013 Michael S Fink
Most business owners understand sales but few understand the intricacies of implementing an effective accounts receivable management strategy. In fact, it is one of the most overlooked aspects in business today and it could be costing you a lot of customers and a lot of money. Your customer bought from you before, if you provided a good product or service, they are very likely to buy from you again. Don't lose them before their next purchase.
The Most Overlooked Aspect Of Your Business
If your company is like many others I work with, you are spending a lot of time and money adding new customers. It is probably one of your primary business focuses. Who is responsible for the customers that are leaving? How much money are you letting slip away? In business today, your customers are critical to your success and they are probably harder to come by now than they were only a few years ago. Yet many companies are missing the boat when it comes to customer retention.
One way you can increase customer loyalty, improve your cash flow, and increase customer spend is by offering customers terms. We all know that customers are more likely to buy now if they can pay later. They are also more likely to spend more money and buy more often. The biggest concern with implementing or managing accounts receivable is today many of your customers are struggling.
Implementing an effective accounts receivable strategy is easier than you may think. Here are some of the common mistakes to avoid.
The Most Overlooked Aspect of Your Business - 7 Common Mistakes
1. Hiring an accounts receivable factoring company. This is the quickest way I know to drive your customers into your competitor's open arms. Factoring companies don't care about your customers. They just want to get paid and fast. They are willing to burn the relationship for quick cash. You lose control over your customer's satisfaction as soon as the account leaves your hands.
2. Having the wrong information on your invoice or statement. Not clearly defining payment expectations, methods of payment, and contact information will only delay your payment.
3. Waiting too long before first contact on a balance. This is essentially training your customers to pay you late. Contacting your customers with an outstanding balance in the wrong format. Should you send a collection letter, make a phone call, visit the customer in person, send a fax, or send an email? Where can you find a phone script or sample collection letter?
4. Vilifying your customers with an outstanding balance is the wrong approach. Your customers are busy. Chances are they are not staying up nights, checkbook in hand, waiting for your invoice or statement. Your money is more important to you than it is to them. You need to keep this in mind when you talk to your customer.
5. Not keeping up to date with the changes in the FDCPA, HIPAA, and TCPA laws. Yes, these laws do apply to you.
6. Turning an account over to a collection agency too early or too late.
7. Picking the right collection agency. Your best bet is to avoid sending accounts to debt collection agencies with an efficient accounts receivable strategy.
About Michael S Fink
If you would like more information on how to create an effective accounts receivable management strategy visit us at http://whohasmymoneyonline.com/ or call 800-576-4974 to schedule a FREE 30 minute coaching strategy meeting with me.
About Chia-Li Chien
Chia-Li Chien, CFP®, CRPC, PMP; Chia-Li “like JOLLY,” Succession Strategist of Value Growth Institute, dedicated to helping private business owners increase their company equity value. She is the award-winning author of the books Show Me The Money and Work toward Reward and a faculty of the American Management Association. Her blog and newsletter was named a Top Small Business Resource by the New York Times You’re the Boss blog. Contact her at firstname.lastname@example.org or (704) 268-9378 .