So then there’s the A/R situation – if you are like 99% of businesses in America, you have issues from time to time with customers who are slow to pay or refuse to pay. You need to bring that money in for your business to operate, but hounding those customers could cause all sorts of problems: they could complain, feel alienated or punished, tell their friends about their ‘bad experience’, and possibly still be unwilling to pay.
How are you dealing with this? Are you giving them plenty of time to pay, hoping they’ll come around? Did you hire an agency to go after them, risking your relationship and forfeiting 40% or more of what’s collected? What about attorney scare tactics? The thing is, these strategies are outdated – they represent the stigma that goes along with the idea of ‘collections’.
Let’s talk about early intervention.
What is it? It’s an A/R management philosophy that promotes proactive communication at the beginning and throughout the pay cycle. Instead of waiting for your customers to fall behind or become delinquent, you touch base with them right as the account reaches the cusp of becoming past due. Communication remains friendly and customer-oriented, and serves as more of a reminder rather than a scolding.
How does it work? Put yourself in your customer’s shoes. Have you ever been late to pay a bill? There was probably a reason behind it – you forgot, you lost the invoice, you may have been enduring a period of financial hardship. You, like your customers, probably had every intention of paying, but sometimes life gets in the way. Now, what if the company you owed provided you with approachable communication, payment options, or simply a listening ear to understand what happened? Much better than being chased and shamed!
Why use it? Ask yourself these questions:
· Do you want to create positive cash flow within your business?
· Do you want to do it without causing strain on your customer relationships?
· Do you want a system that is proactive rather than reactive?
· Do you want to see your customers respond, as well as return?
Does it take a slight shift in perspective? Yes – but think about it. Wouldn’t you rather extend the great experience your customer enjoys beyond their sales cycle and into the full life of your relationship? Think about how employing early intervention strategies could change the entire culture of your company – less worry about money coming in, less pressure on your staff to chase down delinquent accounts and have awkward discussions about lateness. It’s more than just a solution for you – it’s really an extension of the services you provide for them.
TekCollect provides the most advanced accounts receivable, collections, and client retention services available. To learn more about us, visit our website and follow us on Facebook and Twitter.