12 Effective Ways To Get Money Out Of Your Customers (Quickly)

There’s so much to take into contention when running a Business:

  • Spiralling costs
  • Rush of new sales
  • Getting in old debt as quickly as we can
  • Getting out there and chasing for new business
  • Ensuring that account management on existing Customers is going smoothly.

And these are just the tip of the iceberg, without having to worry about delivering the work to your clients, and ensuring there’s enough coffee to get through the day.

The best method of coping with being in such high demand is to ensure your processes are up-to-scratch.

Since it’s my speciality, I’ll be focusing on the financial side of business in this blog.

The following are just 12 major points in how, with a bit of internal restructuring and planning, you can make good your bad debtors.

1) Get it right at the front end!

Generally, Accounts Receivables/Credit Control/Customer Accounts are perceived as those at the back end.

… Waiting for those Sales to come in and the Invoices to be chased.

Putting it right at the forefront means that correct processes are followed through in:

  • Credit checking your Customers
  • Ensuring that your Sales Staff have the correct notes documented in any initial conversation (should things turn sour at a later stage)
  • and/or ensure that all emails are safeguarded, as you just never know when you may need them

By having controls in place, you are better versed as a business owner or decision maker within a business.

Which ensures you’ll have the confidence to reduce your bad debt straight away.

2) Apply Credit Limits

The kind of Credit Limits you set should depend on the type of product or service you’re selling to your end user.

E.g. Would you credit check a new business?

Maybe not, as they don’t have an established set of published accounts.

So you need to factor in a loss factor right from the beginning.

Naturally, new businesses and those who have failed to maintain some of their payments in the past should be allocated a high risk rating, and a more sensitive credit limit given.

… However, the discretion is absolutely yours here.

3) Send out Invoices promptly

Essentially, as soon as you have a system in place which depicts Contracts to be loaded, it’s up to your Billing Team, and Accounts Receivables team to have the correct Invoices raised and sent out promptly.

Without that, Customers are not likely to pay this to you.

This is an obvious one, but sometimes the little things get missed in a big business operation.

4) Telephone Manners

Many businesses will either forget or will not deal with invoices unless they are chased.

So, for your Invoices to be paid in a timely manner, it only makes sense to have a structured follow up system to get your Debtors to pay you.

The most effective way to communicate this issue, though not our go-to method anymore, is still by picking up the phone.

5) Send letters out promptly

Like that of effective telephone chasing, letters have an effect too.

These are more likely to be documented by the business than, say, an email.

I strongly advise employing more than one method of chasing.

6) Send Statement of Accounts when requested

If a Customer feels that they have not received a good service from you, or that the payments they’ve made have not allocated correctly, they may rightly request a Statement of Accounts.

A Statement of Account will show, in detail, all payments made by them.

For Start-Up’s, an Excel spreadsheet will suffice.

However, as you get larger it’s better to obtain a CRM system which does this for you automatically.

From time to time, your Accounts Person and/or Accountant may not have marked the account properly, so it is essential to bear in mind that you would need to conduct a reconciliation, and/or employ a Specialist Business Adviser or Debt Consultant to do exactly that.

7) Send Credit Notes promptly

To tie in with Point 6, it’s important that if there is something amiss on the Statement of Account you raise a Credit Note to show the correction.

It’s important to keep customers satisfied through good Customer Service.

Ask your Accounts Department or Billings Team to deal with this, if you have one.  Or, if you’re a smaller company, remember to perform this job yourself.

8) Quality Control

There are likely to be other instances, depending on the type of business or industry that your company/business operates in.

So, it is best to have a good system in place to follow up on any queries that may come in.

By not dealing with them, you will only loose your existing Customer.

From experience, I have found that just a simple query resolution is often all it takes to get your debts paid in little or no time.

9) Improve Communications

As with Point 6 and 9, it is important to monitor all communications with your Customers.

I cannot re-iterate enough that if you treat your existing Customer base with distaste you will only antagonise them further.

Think about sending out a survey, or simply asking them how you can perform better. Their response could help you obtain better repeat business.

10) Credit Control Training

Having worked in a lot of different industry sectors, I know it is always crucial to have the correct set of credit control processes in place.

If you feel that your staff could be better at dealing with some of these queries, then why not request a specialist to come in and discuss these issues.

They may find a way to assist your current team by giving them a better understand, so they can become more effective Credit Controllers.

11) Sales input

Sometimes, it’s better to have a departmental collaboration.

So, it may be imperative to have your main sales contacts sit in with you to alleviate stress if the business is not reaching its collections targets.

All Sales and Credit Control Teams, be they small or big, need to be prevalent in working together to understand the lifeblood of the company; their Customers.

Sometimes, it may help to work as a Team and play ‘Good Cop, and Bad Cop’ to overcome any issues that may arise in the future.

12) Attend to 90 day debt

In larger companies, Senior Management would meet on a regular basis to discuss the high end debt balances.

For small companies, anything that goes wrong can cause frustration.

Consider consulting an expert who deals with these balances to see what you could do to get these overdue invoices paid quicker than you previously thought possible.

If you need any further assistance, or could do with a free no obligation chat regarding any existing business debts, please don’t hesitate to get in touch.

Tel: (+44) 0208 088 4565


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