Collection issues are very serious.
To solve the problem, you generally must take a big picture view of the situation and look at collections as an entire process that must be evaluated, changed and monitored.
Here are some issues to consider:
Do you have a collection policy? Is it communicated effectively?
Do you charge late fees? If not, should you?
Do you offer discounts for early payment?
Can your systems handle late fees and discounts?
Who is responsible for collections? Is the process centrally managed?
Do you have a system of calling customers to collect accounts?
Are all calls recorded and followed up?
Do you send collection letters? Is the process automated?
Do you refer to attorneys early enough to make a difference?
Are sales people involved? Should they be?
Do you back charge commissions?
Have you examined your cash cycle?
How long does it take to get an invoice out? Can you shorten the process?
Do you have special situations? Problem customers that need to be dealt with separately?
Are your write-offs too high?
These are only some of the issues involved in looking at a collections system. We can help you evaluate your systems, establish new policies and procedures and monitor your results. Contact us for help in improving collections. Putting more money in the company often won’t solve the real problems.