When you run your own business, cash flow is everything. If you don't keep on top of it, it can quickly get out of hand and this means that you have to do everything in your power to keep accounts receivable to an absolute minimum. Most businesses have to extend a certain amount of credit during their day-to-day operations, but many do not pay attention to the way that they communicate their terms. What should you be thinking about, in order to keep debt recovery efforts to a minimum?
What Do Your Terms Say?
A lot of small business owners use "off-the-shelf" contracts. They may understand that they are necessary, but frequently do not take the time (or spend the money) to get them independently verified by an attorney. As a consequence, they often use "stock" sections that talk about payment terms, without paying attention to what's actually said.
Therefore, the first thing to do is to go over the fine print included in the contract and make sure that you are happy with the payment terms outlined. This section should be highlighted and be very clear. It's also a good idea to discuss the payment terms verbally with any new customer.
Next, ensure that the payment terms contained in the invoice are equally as clear and correspond with those in any contract. Put a very clear link on your website, with an equally clear description of your payment terms, in case anybody needs to refer to this in the meantime.
Have a look at the way that you lay out your invoice and redesign it if necessary. Get a second party to have a look with a fresh set of eyes. Ensure that the due date is very clear and in a larger typeface than the wording all around it.
Keeping a Record
You need to have a system in place that automatically records any contact made with the customer, especially when it comes to chasing the payment. This needs to include the date you send the initial contract, the date that invoices were sent and the details of subsequent telephone calls or conversations.
Being the Enforcer
Finally, make sure that you enforce all penalties and claims for interest, even though you think that you might lose the customer if you do so. This will spread the word that you mean what you're saying and helps to keep late payers at bay.
Calling It in
If you're still having trouble collecting the money, get in touch with an expert debt recovery agent to help you.
Contact debt collectors in your area for more information and assistance.Share
16 June 2017
Hello, my name is Jenny and this is my probate law blog. I should say now, I am not a lawyer and I have not had any professional legal training. However, I do know a thing or two about probate. I taught myself a lot after the death of my grandma. My grandma left a lot of money and property behind, but unfortunately, she didn't leave a will. This lead to several family members staking a claim on the inheritance. I instructed a lawyer to act on my mother's behalf to ensure that she was not cheated out of her share.