Payment Incentives: To receive faster payment,
offer customers a 1- to 3-percent discount for early payment;
payment with 7 to 15 days is standard for a discount. Encourage
credit card payment as well.
Early Intervention: Recovery efforts initiated
early in the revenue cycle have the highest rate of return.
Beyond 90 days, recovery rates decline significantly. Implement
a recovery strategy that mitigates collection issues during
the early stages.
First Stage: If payment is not received by
the invoice due date, send a reminder the next day. Don’t
hesitate to call the customer. A phone call early on is 10 times
more likely to get a payment response than a conventional written
or e-mail message.
A Unified Approach: To maximize debt recovery,
contract with an accounts receivable management company that
offers both timed collection letters and phone calls to manage
early stage collection efforts.
Reputation Matters: When contracting with
an outside receivables management firm, work only with licensed
companies affiliated with regulatory institutions such as
the Association of Credit and Collection Professionals (ACA)
International.
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