QuickPayment: Tips For Managing The Invoicing and Collections Process

Invoicing & Payment Processing

1)		Know Your Customers When building a new relationship be sure to research and understand your customer's credit and payment history. Have the customer complete a credit application and request references. Take the time to check those references to determine how long they have done business with the reference and if they tend pay on time. You can go one step further and request a financial statement.

2)		Improve Timing & Accuracy Of Invoicing Ensure the accuracy and timeliness of all invoices. If possible, send invoices electronically and/or immediately upon shipment or rendering of product or service. Be sure the invoice has the correct address and is directed to the correct person within the business and/or department. Also include the name of the person who ordered the product appears on the invoice and provide as much detail as possible for services or products purchased. Specify any discounts for early payment and any penalties for late payment. If the invoice is being transmitted electronically and will not use a postage paid envelope, include address information to which payments should be sent.

3)		Use Postage Paid Envelopes Providing a postage paid envelope along with the invoice is customer friendly and a way to encourage faster return payment. This will guarantee the payment is routed to the correct address. Be sure to also leverage "Address Service Requested" and print this information on all customer correspondence (envelopes). This will help you to remain informed via the Post Office should the recipient change their address.

4)		Encourage Advance Payment With Discounts Offer a discount to customers who pay within a specified period of time (i.e., 5% off for invoices paid in less than 30 days from the invoice date). Also establish an interest or late payment fee if appropriate. Be sure to include this information on the invoice as encouragement for prompt payment and policy on delinquency.

5)		Provide Payment Options Determine the method of payment that works best for the customer and leverage the Internet whenever possible. Use the Internet for banking and consider switching to EDI (Electronic Data Interchange/transfer of data between companies). Bill the customer using their web site and accept credit card payments via the Internet. ACH (Automated Clearing House/electronic funds transfer) payments, may be an option and/or "checks by fax" which also allows the credit manager to draw a check if the customer provides some very basic information. Additionally, increase overall electronic payment enrollment by also providing credit applications and statement copies online for customer convenience. Remember to utilize email as a communication and collection tool in an attempt to elicit faster response.

6)		Create A Best Practices Accounting Policy Establish well documented policies and best practices for accounting. Outline the handling process and communication strategy for delinquent payments in order of priority (mail, email phone, fax). Automate the collection process as much as possible and adhere to regular dispersement of collection communications. Document all communications and conversations to include in each customer file (and for future reference should the account come into question).

Collections

7)		Prepare In Advance For The Conversation Review the account, focus on the history, credit record, and past promises made. Be sure to have the file and/or record in front of you for quick reference.

8)		Maintain A Professional Attitude Be straightforward. The work has been completed and/or the product shipped and you should expect to be paid for the services rendered. Do not let it become personal. Do not lose your patience. Keep your voice at a firm and even tone, but do not make threats. (Legal action is your recourse).

9)		Be Flexible Each situation is different and may require some adjustment. Understand the type of customer you are dealing with and remain open minded about the circumstances. Be open and prepared to accept a reasonable payment schedule and willingness to deal with a customer's circumstances.

10)		Be Precise Every contact should result in a commitment for payment. Determine a specific amount and date of receipt prior to concluding the conversation. Better yet, request the check number the customer will use to complete the transaction.