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How To Expedite Your Accounts Receivable? From A Professional Debt Collection Agency

When you are running a business, engaging the right support and keep your business in good shape is vital, client not paying invoices can be a pain for many business owners. According to Australian Bureau of Statistics (ABS), outstanding accounts receivable is a barrier to general business activities or performance for more than 10% of SMEs, and 5.9% of large enterprises. So what can you do to drive your receivables better?

Tips from a professional debt collection agency

1. Set up an accounts receivable procedure

Have a policy/plan in place for receivables is the fundamental of consistent recovery of money. It needs to cover the whole process from new customers on board to when invoices are paid or to the steps in event of non-payment. For example, customer on board => agreement/credit application form completed => sales & release orders => issue invoices => invoices due => 1st reminder within 7 days of due date => 2nd reminder between 7-14 days overdue => final notice for 30 days overdue accounts => send to debt collectors when overdue hit 50-60 days.

2. Know your customers

Learn more about your customers before offering them credit accounts could be the first safeguard to your own business interests. Credit investigation report will allow you to have a deep insight of how your customers paying back accounts, some bureaus even offer ratings of likelihoods for late payment that could help non-credit professionals understand more about their risks.

3. Make sure good terms & conditions for your trade agreement

Good terms & conditions could get the debt collection procedure a lot smoother, especially for serious overdues. It could potentially increase the success rate from 50% to 80% (depending on the scenario). Furthermore, it could allow your debt collectors to nominate collection costs to the debtor plus charge an interest for the amount outstanding.

4. Send invoices ASAP

After products/services have been sold, issue invoices to your customers ASAP so you can be paid sooner. With the advancement of technologies nowadays, digital invoicing and email copies through can make it easier, some ERP systems even combine sales & accounts functions together, which could enable you to get invoices ready when creating orders, and automatically email to customers when orders are dispatched/picked up.

5. Discount for early payment

Offer a discount for payments made before due date can be a good solution to encourage customers to make payment in time. For example, an early payment discount of ‘2/10 – net 30’ means that your customer can deduct 2% from the total invoice amount if paid within 10 days of the invoice date.

6. Partner with a professional debt collection agency

It is essential to collect outstanding receivables internally, find a good debt collection company can make your accounts receivable process more effective. Although each debt recovery agency offers different services, some of them are able to help you mange the entire accounts receivable & credit control procedure, or provide coaching and consultation if you want to manage accounts receivable internally.

Xservice Debt Collection specialise in commercial debt recovery, working as an extended part of your team, offer professional collections services as well as accounts receivable/credit management. Call now and discuss your needs with an expert today.

Need more advice about debt collection? Read our blog “One Best Tool To Reduce Bad Debts

Consider our “Receivable & Credit Management” service


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