Proper communication can solve problems in both personal and professional circles, and it's invaluable when trying to chase down late or non-paying customers. When clients leave bills unpaid for long periods of time, owners and operators are faced with finding effective ways of reaching customers to retrieve monies owed. No one enjoys the task of having to ask for money, and the recession means debts are even more difficult to retrieve. But just a few overdue accounts can have a significant impact on your cash flow and put you in a difficult position when it comes time to pay your own bills.
A straightforward approach employing old-fashioned customer service will produce better results and strengthen your bottom line while helping you retain your customers. Some things to keep in mind:
Develop and communicate your payment policy. To set the stage for improved collection results, develop a payment policy that informs new and existing clients of your company's billing process and follow-up procedures. This lets clients know how and when they will be billed and the time frame in which they are expected to pay. Communicating your company's guidelines to customers manages expectations and drastically reduces uncertainty and surprise when a bill is sent. Making the effort to convey your billing policy up front can reduce the number of unpaid accounts and notifies customers that you are steadfast about receiving payment in a timely manner.
Employ quality team members. Developing a successful policy is a good start to improving your accounts receivables, but having employees who will follow through with procedures in a respectful manner is key. Staff members play an integral role not only in customer service but also in retrieving monies owed by setting expectations and treating customers with respect and diplomacy. Take care to ensure that you are hiring quality individuals. Train them properly to ensure that they are fully versed in billing policies and can convey that information effectively to clients.
Use a customer service-based approach to delinquent payments. Even with strong policies and procedures in place and a solid team of staff members, bills may remain unpaid. In these cases, a customer service-based approach can help recover overdue accounts.
When bills remain unpaid for 30 days, a customer service letter or call is an effective way to reach out to a client, get feedback on your business and open the opportunity to discuss monies owed. Such a call or letter can provide you with invaluable information regarding your service and what may be delaying a client's payment. Both approaches give your business the opportunity to approach clients directly and ask them about their experiences with your company in a caring and diplomatic manner. The call or letter should mention your company's payment policy and inquire as to how the client would like to go about settling their overdue account. This approach is soft, sincere and can effectively expedite retrieving the payment owed to your business.
Have a plan for stubborn accounts. Altering your internal collection procedures can produce dramatic results. However, there will be times when customers do not respond to any requests for payment and accounts remain overdue. After 90 days, it may be wise to seek outside help from a collection agency. Look for a reputable team that is a good match for your business and who has your values and mission in mind. A few factors to consider while considering a collection agency: freeing up staff time, affordability through a flat-fee system (expect to pay a minimum of $10-$15 per account), online access to your accounts, and experience (an established firm generally boasts higher collection rates). Make sure any collection agency you contract with understands that it is your goal to keep your customer and that they need to handle that customer with care when trying to secure payment.
A few changes to your accounts receivables process infused with a little customer service can help your waste and recycling business enjoy a strong client base and attract future business.
Matt Moskowitz is one of five partners of American Profit Recovery, a collection agency with offices in Kentucky, Massachusetts, Michigan and North Carolina. He was recently honored as one of Collection Advisor Magazine's Top 50 Most Influential Collection Professionals. Mr. Moskowitz can be reached at email@example.com or 877-634-8900.