The Best Ways to Prevent Overdue Accounts
Want to improve the way you run your business? For any company, having overdue accounts wreak havoc on cash flow and liquid assets. In a small business, tracking down the guilty parties is both a financial and physical drain. It's easy to say "don't do business with deadbeats", but the realities of things are much more complex. Most firms bring in collection agencies for debt. Be sure to find out: • How information about delinquent accounts will be transferred to the agency. • When collected funds will be forwarded.
• What reports are provided detailing the collection progress and success rates? • How you can stop collections if you receive payment or credit an account. Do a firm credit policy, including credit ranting checks, terms of payment, repercussions of non-payment and stay to it. Rules for different credit scores and groups require a deposit for opening an account. For instance, allow a small discount for early payment, or demand a late fee for late payment. Make sure your customers know you keep careful track of account standings. Call them reminding the customer about their account balance, due dates, and repercussions of non-payments. Do a partial payment reminding them that they have a remaining balance left, and that it isn’t paid. Don’t do business with customers’ accounts that is delinquent. Cash only basis or refuse services. You’re not a bank, you’re a business so don’t just give it all away. However, in today’s economy we want and need to avoid overdue accounts. Dealing with true businesses accounts and all sorts of vendors, there are two rules: “don’t spend more than you have and always pay your bills on time”. Budget income, list your net income and expenses, including outside payments, unemployment, and child support. If you have a business, include all of its income as well. For Example: rent/mortgage, food, non-food items etc. This is how you know how much extra you have to...
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