If someone owes you and doesn’t pay you, apply these 4 steps to speed it up.

By January 11, 2019 Finance No Comments

All entrepreneurs can attest to how little or not at all fun are the weeks and even the months that pass between the moment they bring their product to market and until customers pay.

To help reduce that gap, test the effectiveness of the following strategies.

You have to consider that much has to do with common sense, but since there are no two companies whose billing and payment structure is identical, confusion often reigns.

And where there is confusion, the client finds an excuse not to pay.

Invoice quickly and correctly.

Make sure you collect each and every payment instruction when you receive an order, and then follow them to the letter.

This includes data such as the purchase order number and the complete contact information of the person in charge of accounts payable.

Another recommendation is to invoice the day you deliver the merchandise and send the invoice in electronic format, followed by a hard copy (only if the client requires it).

Highlights the total amount to be settled, the date to be paid, the name that should appear on the check and the address where it should be sent.

Encourages prompt payment.

Organize your business to accept credit cards or electronic bank transfers.

It usually works to offer discounts of up to 3% in payments made within 10 days from the billing date.

Be relentless with follow-up.

In the case of invoices sent electronically, verify the next day that the recipient has received them.

Two weeks before the payment date expires, contact the accounts payable (customer) manager and ask if you have everything you need to authorize payment.

If not, take care of it immediately and send what is required.

One week before the payment deadline, call to confirm if the payment has been approved, and when and how it will be made.

Manage your performance.

Take advantage of your accounting system to generate detailed summaries of accounts receivable in real time.

These reports should list all movements and transactions by deadline, amount and customer, ranked from highest to lowest.

The goal is to know where you can get more cash (and faster) by focusing on the oldest, highest or most important amounts.

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