As discussed in our previous post, preventing invoices from becoming past due is the best scenario for any accounts receivable department. Now, let’s delve into the best practices for AR Management to ensure on-time payments. On-time payment improves cash flow, optimizes resources, and facilitates working relationships. Regrettably, this is not always going to happen. There will be those who don’t pay on time, who forget to pay on time, or worse, don’t have the ability to pay on time. This is when the pursuit phase of accounts receivable comes in.
When your customers don’t pay their invoices on time, they’re basically treating your business as a bank. And if you don’t charge late fees, then they’re getting an interest-free loan. Worse yet, studies show that collection rates drop precipitously the longer they’re left outstanding. In fact, when they’re 90+ days past due, collection rates are just 74% according to Entrepreneur. This can present a problem to your cash flow, potentially impeding your business operations in so many ways. To help ensure speedy recovery of outstanding invoices, let’s look at pursuit and make sure your business has a solid plan in place to recover the money it’s due.
Having a standardized, business-centric process should be the key focus in your pursuit program. While no business ever wants to be in a position to have to chase down past due bills, as it requires time and money your business may not be able to allocate, there are ways to handle it in a way that can increase the likelihood of payment while ensuring a solid working relationship going forward.
Following are four important steps your business can take to make the pursuit phase of your AR program run as smoothly as possible:
As you create the letters to accompany the invoices, keep in mind that each letter should reflect a greater degree of urgency as the invoice gets further and further past due. This should be in the subject line of the letter, where you also indicate how far past due the invoice is or other steps for remediation. Write things like “Invoice #13306 – 30 days past due” or “Payment Plan for Invoice #5516.” Also make sure to provide contact information – including a name, phone number and email – so the debtor can reach out with any questions.
As you look for a partner who can help you with your invoice recovery, consider reaching out to MakeGood. We have rebooted revenue recovery with streamlined processes, offering early payment discounts using motivational language, penalizing slow payers, and ensuring a modern payment experience. We can have you up and running on your 90-day free trial in just a matter of hours.
In our final post in this series, we’ll look at placement and how to work with collections agencies to recover a past due invoice.
Eliminate the worry of getting paid with MakeGood’s A/R software and full accounts receivable management by our A/R professional services team.
• DIGITAL ONLY: $2.00 /invoice
Only pay when you get paid!
• DIGITAL + PAPER MAIL: $2.50 / invoice
Only pay when you get paid!
Additional letters billed at $1.25 per 1-page letter
• MakeGood’s professional services team manages your accounts receivable
• Regularly scheduled check ins with your assigned MakeGood A/R rep
• Account Placement with professional collections agencies
• Augment your team with MakeGood’s A/R professionals
• Priority collections rates
Let MakeGood manage your slow payers.
• DIGITAL ONLY: $.50 /invoice
Only pay when you get paid!
• DIGITAL + PAPER MAIL: $2.00 / invoice
Only pay when you get paid!
Additional letters billed at $1.50 per 1-page letter
• MakeGood’s professional services team manages your past due accounts
• Regularly scheduled check ins with your assigned MakeGood A/R rep
• Account Placement with professional collections agencies
• Augment your team with MakeGood’s A/R professionals
• Priority collections rates
MakeGood’s Pro Plan – Pursuit+ is for businesses needing a trusted solution for dealing with slow payers and preventing write-offs.
• DIGITAL ONLY: $.25 / invoice
Only pay when you get paid!
• DIGITAL + PAPER MAIL: $1.50 / invoice
Only pay when you get paid!
Additional letters billed at $1.25 per 1-page letter
• Activate custom workflows when an account goes past due
• Negotiate settlements with payment plans
• Account placement with professional collections agencies
• Priority collections rates
• Priority customer support
Complete A/R management software.
PRICE
• DIGITAL ONLY: $0.25 / invoice
Only paid when you get paid!
• DIGITAL + PAPER MAIL: $1.50 / invoice
Additional letters billed at $1.25 per 1-page letter
BENEFITS
• Full access to all features
• Negotiate settlements with payment plans
• Account Placement with professional collections agencies
• Priority collections rates
• Priority customer support
Manage up to 10 invoices per month for free!
• No restrictions – full access to all features
• Negotiate settlements and manage payment plans
• Account placement with professional collections agencies
• Send Invoices, Statements & Other Letters with Your Brand
• One page letter billed at $1.25
• Each additional page billed at $0.25