Business 5 Pro Tips on How to Collect Delinquent Accounts Receivables Share on Facebook Share on Twitter Share on Google+ Share on Reddit Share on Pinterest Share on Linkedin Share on Tumblr Credit: Pixabay Do you have clients who don’t meet their debt obligations or are always late with payment? How do you collect on these accounts without destroying the customer relationship you’ve built over the years? In order to turn a profit, it is important to manage the delicate balance between a steady stream of new customers coming through the door, serving your existing customers and keeping your books in check. This calls for proactive management of cash flow. Some of your clients might delay payment as a result of forgetfulness, shortage of funds or just plain carelessness. Others won’t pay until they feel they have to, and others might not even be planning to pay. It’s sad but true. So how do you deal with such clients? Let’s go over some tips on how to collect money from clients like a pro. Issue Invoices Credit: Pixabay This might seem somewhat obvious, but you need to invoice constantly and consistently until you receive payment. It doesn’t matter how small or large the amount is. You have to issue an invoice. Many business owners find it easier to waive off small billable amounts or charge them to the next bill to save time and costs. This is not good practice as it can backfire on you. The customer could forget to pay and even fight the charge later on. The customer could also never buy from you again for one reason or the other. There’s also the chance that you could forget to bill them for the amount next time. It is instructive to note that small amounts can add up and leave your business with a gaping shortfall in the long run. Reissue the Invoice and Charge Interest Credit: Pixabay Late payment should attract interest. If 30 days lapse without getting a response from the client, you should resend the invoice and let them know that you will be charging an interest if they do not pay up by a certain date. Re-sending the invoice is important since the customer might not have received the first one, or they might have forgotten to act on it. Follow Up Credit: Pexels Send a follow-up invoice and make a call shortly after, Follow up shamelessly and tenaciously. You could also send an email depending on the nature of your relationship with the client. However, talking to them over the phone is more effective since they can’t choose to ignore you. If the client is experiencing extenuating factors that they might not want to divulge to you, a phone call might help clear the air. Take Cash on Delivery for Problem Customers Credit: Pixabay If a customer proves to be problematic, insist that they pay cash. If the client has a pending accounts receivable, let them know that they will have to pay cash until all outstanding invoices are cleared. If they are not prepared to do this, then you might as well sever links since they might not be good for your business. Don’t be afraid to do this since delinquent customers can only lead to poor cash flow. This is how to collect money from clients. Have Firm Policies Credit: Pixabay Avoid bending over backward to accommodate new clients especially when it comes to payments. If you do, it will only lead to trouble farther down the road. Stick to set policies to avoid a situation where a customer is caught by surprise or feels untrusted. Customers will always adapt to your rules if you make them clear well in advance.