Gettin' Paid- Improve your technology business collection process

So many things to talk about and somehow I am falling a bit behind on keeping up this week with the blog. For that reason I decided to go back to some basics on collecting payments for the hard work you've done.

As a small to medium sized technology business owner, you have to do all you can to protect your business from the unwanted costs and hassles of late and unpaid bills. But odds are, your business already has or will someday have to deal with uncollected debt.

Surveys say 50% of all small businesses get stiffed every year and not necessarily just by small accounts. Ouch, that'll leave a mark alright.

While some businesses are profitable enough to sustain these significant losses from bad debt, many are not. Sadly, many of these problems occur because a business doesn't bill clients in a timely fashion, has no internal rules to deal with invoicing and collection, and never relays these rules to the client before the work even starts. Amazing but true.

Here are 5 tips that may improve your billing and collections process.

1. E-mail and mail your invoices. The process is very straightforward and should be used whenever possible. No stamps, no envelopes, no waiting in line at the post office. Most importantly, online billing helps you get bills out faster, so you can paid faster. You may also want to drop a paper copy of the invoice in the mail to your customers, so they are sure to know what they owe.

2. Look for more ways for your customers to pay. Besides accepting checks and cash, consider offering other payment options, such as credit card payments to your customers. You need to make payment an easy step in your customer's buying process.

3. Use payment reminders. Whether a short note or a quick e-mail, friendly payment reminders are a cost-effective way to stay on the radar of those who owe you money. Don't expect customers to police themselves. Instead, make sure to properly send statements and reminders of past due invoices.

4. Purchase credit reports. If your invoice amounts to any particular company are more than you are prepared to lose, then you may want to consider buying a credit report. These reports can be extremely helpful if you don't know much about the customer/company or its financial record. And as mentioned earlier, credit reports are an inexpensive way to verify the creditworthiness of your customers.

5. Monitor the credit rating of your top accounts. Stay on top of the credit health of your most important customers. D&B offers business credit reports starting at $20 per company. D&B sells a range of credit reports, from a simple report that provides a quick overview to a more detailed report that offers in-depth information and credit monitoring.



Here's one more little scare tactic that works well with medium to small business clients:

Let them know you use outside credit agencies. If you use D&B, you have the ability to report favorable and unfavorable payment experiences to D&B, as well as the option to use the D&B name on your invoices informing customers that you share their payment history.


That's it for today.

To Your Business Success-

George Sierchio
The Consultant's Coach

PS If you are on the NYC area, don't miss out on SMB Nation East. There's still alittle bit of time to sign up for this awesome event that starts on May 1.