A prompt reminder of when money is due exemplifies good business practices that can save a company lost revenue and wasted time. Providing customers with a straight-forward confirmation of recent discussions and/or negotiations, such as the ‘Promise to Pay’ letter, creates the continuity needed to support your rights in the event the customer fails to pay what is due.
Remember, your statements and letters, when referencing unpaid balances, should also contain a reaffirmation of the agreed terms such as: “Our terms are net 30 days. Any amount not paid when due will incur interest of 18% per annum (1.5% per month). Should balances not be paid timely and it is deemed necessary to employ an outside collection agency and/or an attorney, Customer is liable for all actual collection fees, all actual attorney fees, plus all court costs’.
Business people intent upon diminishing your rights, or looking for an excuse not to pay what is due you, will suffer from ‘subjective memory loss’. Your job is to make sure their memory does not fail them or you!
Protect your profits during the ‘work process’ by documenting significant events such as changes to the original order. The following forms are just a few ideas and suggestions that can support your rights in the event the customer ‘forgets’ what instructions were provided or what was agreed to.
MS Word (.doc)
|Alteration and/or Change Order Request Form|
|Late Receipt of Materials Acknowledgment Form|
|Rush Order Request Form|
You have completed all work. The customer accepted delivery and it’s time for you to be paid; but, WHERE’S THE MONEY? Following up with customers on a timely basis affords creditors the best chance of successful results. Here are just a few ideas that can facilitate your internal collection process.
MS Word (.doc)
Debt Settlement Agreement With Terms
|Debt Settlement Agreement|
|Installment Promissory Note|
|Request for Extended Credit Terms|
|One Time Credit Card Payment Authorization|
SUGGESTED ACCOUNT RECEIVABLE
TIPS AND PROCEDURES
This publication is designed to help business people determine a common-sense strategy for financial success through the development of sound yet practical account receivable practices and policies. The objective is to help you get and keep the money due to you without having to try and catch it.
|Common Sense Strategies for Better Accounts Receivable Management (PDF)|
All letters and forms are Adobe Acrobat files (.pdf) and/or Microsoft Word (.doc). Feel free to alter to your needs.
You now have the tools to
Know Your Customer.