Wouldn’t it be great if you could find ways to get what’s owed you without having to look outside of your own company for help? Increasing your revenue by 10-15% can be as simple as following these three steps to strengthen your credit terms and take control of your cash flow. Common sense tells us that our lives would go a whole lot easier if we would just address issues on the front end and not be scrambling for solutions on the back end when a crisis hits. But, the truth is we’ve all been here before. We’ve been too busy to nail down the right policies and procedures that we need to protect ourselves or sometimes we have had them but have forgotten to follow them. No matter, there’s a better to protect yourself on paper and financially and here’s how to do it:

Accounts Receivables

3 Steps to Tightening Your Terms to Protect Your Accounts Receivables

If getting paid on time, managing your risk, and reducing your back office expenses sounds good to you, then keep reading. These are the three questions you can’t afford not to ask and the three steps needed to permanently seal up the holes in your leaky bucket.

Does Your Credit Agreement Really Protect You? There’s a reason why credit agreements are so lengthy. They are written that way to protect you from every possible scenario where a customer might default. Before you ask your customer to sign your agreement, go over it with a fine tooth comb. First, make sure the agreement supports you in making an informed credit decision on the front end. Second, carefully review every word in your agreement to ensure it spells out the terms of what happens if the customer does not pay. You need to cover every potential issue and excuse the customer can use (and trust me, they have a lot!). Water-tight contracts quickly eliminate most disputes and prevent litigious customers from going to court. Here’s a great example of how, a simple tweak to the language can keep your negotiations in-house and your accounts out of collection.

Do you have Good Policies and Procedures in Place? Always review and evaluate your current Credit/Collections policies and procedures quarterly for any weaknesses or areas that may leave you vulnerable (they are there!) when a customer doesn’t pay. Disputes can arise from outdated policies and procedures, untimely billing, inaccurate invoicing and failing to follow up.  Make sure your policies and procedures spell out a detailed plan that your team can immediately put into motion when the customer defaults to ensure that you are paid for the services you’ve rendered. If you’ve got great policies and procedures in-house already, then be brave enough to ask the bigger question- are you actually following them.

Billing/Follow Up. Timing and accuracy are of the essence when it comes to billing. Many companies don’t have the proper individuals to follow up. This forces the owner to jump from “fire” to “fire” to resolve outstanding invoices and disputes. Implementing policies in advance and training and assigning a staff member to resolve account issues in a set time-frame will keep the five-alarm fires to a minimum and reduce your legal costs and more.

Staying on top of the trends and contract language that will position your company to collect what’s rightfully yours can be a moving target and time consuming. Aldun Group draws on deep experience across industries and around the globe to help you identify and implement innovative processes that will minimize your losses and leverage the relationships you’re already invested in to optimize your business model. Call now for a consultation on credit decisions and national and international Accounts Receivable Management solutions that can close communications gaps with your customers and maximize your revenue and returns.

 

Visit us at http://www.aldungroup.com/ or call me, Scott Leeds, at 770.619.9555.