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Tips & Tricks Revealed - Discover Ways To Get A/R Invoices To Pay Up On Time
This
article may help you discover why successful organizations, at some time, have
had payment issues from those problem clients. The purpose of this article is to
ensure that Accounts Receivables or invoices aren't slow to pay due to something
you are or aren't doing.
One of my first monkey jobs (meaning one of those ridiculously repetitive - I'd
rather be doing anything else - A trained monkey could do this job…) was an
Accounts Payable Clerk. So believe me, I am all too familiar with the way I
thought when I was an A/P clerk. I never looked at what these companies'
invoices represented to the business owners… Their livelihood, their ability to
make payroll, braces for their kids teeth etc. At present, as a business owner
and consultant, I am all too aware of what these invoices represent.
So let's get to some awesome tips to help get those invoices paid up and in a
timely manner...
1. This is going to sound a little… well… DUH but you'd be surprised. Make it
easy for them to pay you! If there is a Purchase Order number, or job number
make SURE it is clearly marked on the invoice. If it doesn't appear somewhere on
the invoice it gets pushed out of the way by the Accounts Payable clerk because
he/she will have to call you before getting entered into their system.
Understand they are paper shufflers. Have you ever seen a paper shuffler's desk?
I bet you see why it is so easy for your invoice to get lost in the shuffle.
2. Make sure the invoice gets sent to the correct person or department.
Sometimes it needs to get approved by a procurement department or similar prior
to getting sent to their A/P. So ask the appropriate people involved who, what,
where, when questions before billing not after invoice is already late. Always,
check and double check the remittance address. Again, be proactive.
3. Never offer “Due On Receipt” terms. In the mind of an Accounts Payable clerk
this becomes “When We Feel Like It…” or “Get Around To It.”. A good, smaller,
responsible company will usually pay these as a Net 10 or Net 15 but others may
treat it as Net 30 or more.
4. Always charge late fees and or finance charges. Just make sure the terms are
clearly marked. This is not tacky it is just good business. It doesn't reflect
poorly on you or make you look desperate. You wouldn't extend a loan without
charging finance charges. Furthermore, 98 times out of 100, no one important
(not to offend any overworked and underpaid A/P clerks) will see your invoices.
5. Don't be scared to call for collections when they go unpaid. You don't know,
there may have been a problem with the mail, a minor discrepancy or some other
minor problem you can get resolved right away. Again, it isn't tacky to say…
"Hey, we provided a great service or product, offered you great terms… where's
the money?!"
The next two tips might “leave some money on the table” but this is what I point
out to my clients… I usually start out with – “Do you accept credit cards?” Most
respond to the affirmative. “Why do you do that?” They usually answer with some
form of “for the convenience of our customers.” “What does that cost you?”
Generally it is somewhere around 1.5%-2%. So why then are they worth the expense
but your company is not? They generally get my point.
6. Offer Prompt Pay Discounts. You pick the amounts but typically it is between
.25% as high as 2% depending on the industry and/or the size of the invoices.
There are some organizations that are required to take advantage of any
discounts offered to them.
7. Consider "selling" the invoices to a factoring company. There are a lot of
companies that aren't aware that this is an option. It is a great strategy for
companies that are growing quickly, have large contract amounts, in a feast or
famine type of industry, don't have well established credit, or just need cash
flow immediately. Most factoring companies will advance 70%-80% of the invoice
amount. Then they pay the remaining balance when received by the customer less
their factoring fee.
I hope you have discovered some new tips & tricks to get Accounts Receivables to
pay up faster. The growth of your company may very well depend on it.
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About the
Author: Dr. Birchall is a freelance writer, consultant, educator, and
researcher specializing in health & business fields. Find other great original
articles at
www.ArticleBuzzDirectory.com. To discover exactly how inexpensive
factoring can be click here to receive your complimentary
invoice factoring quote.
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This Article Is For Public Release & May Be Distributed Freely As Long As The
Resource / Bio Box Remains Intact With Active Link(s).
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