During a recession it’s much more common for clients to delay payments, or in some cases, avoid paying you at all. In fact, as an accountant, you are probably in the best position to predict when clients are struggling financially; you can often use a missed payment as another opportunity to help them right their accounts. Not only can information on securing payments help you get paid, but it can also enable you to help your clients do the same with their customers.
Here are five techniques that will help you and your clients secure payment:
1. Manage your accounts. This is just another good reason for having a professional manage a business’s financials. A small business owner doesn’t want to spend all his or her time trying to collect payment from customers. A Professional Bookkeeper and QuickBooks Specialist are in the best position to manage these accounts, generate invoices, and notify the owner when an account is overdue. This information alone will enable clients stay one step ahead of payment issues.
2. Simplify payment. Sometimes you’ll find that it’s easier to collect payments when the process is simplified, and in some cases automatic. Helping your clients make scheduled electronic payments can be the difference between an overdue account and one that is current.
3. Pay a visit. You know the axiom: “The squeaky wheel gets the grease.” And it’s cliché because it’s true. When you send regular invoices, make personal calls when an account first becomes overdue, and then pay the client a personal visit when a payment is still neglected, you’re more likely to get worked into an already tight budget.
4. Offer payment plan. Some clients may not be able to pay the entire bill at once. Offering to break it into smaller payments could be the one thing preventing them from making a payment. However, when you agree to a payment plan you should consider discontinuing services until a client’s account becomes current.
5. Outsource to a collection agency. If you only have a couple clients who aren’t making regular payments, it may not be worth it. But if you find the majority of your client roster struggling, even after applying the above techniques, it may be time to seek professional help. Often clients neglect to pay those who have no impact on their credit rating. As soon as you outsource this function, that changes, and you no longer have to perform any of the footwork required to get your money. Some mistakenly believe that a collection agency will charge more than they can afford, but reputable companies will not charge anything unless payment is collected. In your most severe cases being able to secure a percentage of a client’s payment is better than securing no payment at all.
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