Accounts Headache?

Accounts Receivable can easily become a giant headache. The best way I've found is to set up a system, and then stick to it.

We'd all prefer to be paid early, not in 30 days, right? Offering even a 1% discount (or 2% if your business can absorb it) can works wonders. Set this up on a "Pay Within 10 or 15 days" of date of invoice plan that is printed on every invoice and every initial statement mailed. The customers who use this feature cost you a bit, yes, but they keep your cash flow healthy and cash flow is what gets most businesses (large or small) in trouble.

Institute and then charge a fee for payments later than 30 days. Find out what local interest rates are at the moment (they do change). Make sure you state the interest rate and a 30-day notice on all invoices and statements.

Set up a tickler file with your computer's calendar feature and enter new charges EVERY day. Figure 30 days down the road. Feed in the name of the person/company who charged with you. Add the invoice number and amount. At the beginning of every day (most of us small business types do this before opening hours), check your tickler file against your Accounts Paid ledger to see who has paid. For anyone who has not, get a notice in the mail immediately.

Here, I find it helpful to just get the cash if possible. Offer a "Get payment to us within five days and we will forgive all interest fees." Do NOT offer a discount at this point!

This, again, is aimed at keeping your cash flow healthy, not for encouraging deadbeats.
Again state what your interest rates are and I even add a second figure (like utility companies) to show what the total then will be if it isn't paid within five days. Don't go longer than five days; that's more than enough time for semi-prompt payment. You might even add, "Interest will be added to the $XXX.XX (full totalwith the month's interest included) if this account is not paid within 60 days. Accounts over 60 days are turned over to a collection agency."

Now, collection agencies eat a whole lot of profit. They are worth it after 60 days since that's probably the only way you will collect your money.

Non-sufficient fund checks are another entire situation usually a messy situation. Have a charge like $30 for any NSF check, but don't count on getting it. If you get a returned check, call the bank before sending it through the second time. For at least five days, call every day to see if the

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