Part 4 of a 4 part series
- Receivables exceed 50 days outstanding.
- Days receivables outstanding increases significantly.
- Significant decrease in sales/receivables.
Steps to Improve: HANDLING DIFFICULT COLLECTIONS
- Balance the firm’s collection attitude with genuine concern for the client and customer service.
- Personalize your concern for the client while collecting forcefully.
- Use increasingly harder demands for collections.
- Use dunning letters and telephone follow-ups.
- Keep notes on all collection contacts.
- Report problem clients’ payment status to management and sales management.
- Convert to notes payable.
- Hire a collection manager or agency to boost cash flow.
- Watch for changes in the collection trends and notify management.
- Study write-offs, returns and allowances to identify problems, then solve them.