The world is certainly full of a number of uncertainties and fears, including this recent pandemic, leaving no individual or business immune to the impact it is having on us all. Many small businesses are finding it difficult to function because of either minimal cash reserves or an inconsistent cash flow. With that said the professionals here at Tax Alternatives want to offer our valued clients the insight needed for effective collection protocols they can use to help significantly improve their cash flow and continue business operations going forward.
TIPS ON HOW TO BETTER MANAGE COLLECTIONS TO IMPROVE CASH FLOW
One of the least favorite tasks or jobs that anyone could perform is that of collections and especially during uncertain, unsuspecting times. However, it is important to recognize that being paid for products and services rendered is essential to your small business cash flow. By putting effective procedures in place, you can enjoy continued cash flow even in the most difficult of times. Here are some simple tips for implementing successful collection protocols.
- Outstanding monies owed can desperately impact your business’s cash flow and minimize business operations. When you implement a successful collections strategy, you are able to improve the chances of getting your invoices paid in a timely fashion. When making a collections call be sure you remain polite but firm in your conversation. Never end the call without setting a confirmed date for payment to be sent or setting a firm payment schedule in place for the customer to adhere to.
- You want to maintain a friendly tone, since as we all know, you get more with kindness and sugar than you do with salt. Your ultimate goal during your collections call is to assist your client as best you can. By being friendly you make your client feel more comfortable about the conversation and about the financial situation and improve your chances for coming to an acceptable solution.
- Finally, during collection calls, it is imperative that you remain focused in your efforts to overcome any objections and be prepared with appropriate responses. You want to be sure you have all the answers set in place before even generating the collections call. It is important that you don’t allow the cash flow problems of your customers to become cash flow problems of yours as well.
There are typically three common collection objections that come into play. The first being the ever so popular ‘I already sent the payment.” If such is the case, be sure to obtain all the payment information, whether hard copy check numbers and date sent, or else for electronic payments the banking institution and the date payment was sent.
A second common objection is that of the customer who ‘sent out half of the payment owed.’ In this instance, your reply is simple, but polite thanking them for their partial payment and then set up a payment date for the final payment to be made.
Lastly, is the unfortunate customer who simply says “they are unable to make any payments at this time.” This can be a difficult and yet delicate situation and one that is best handled by explaining toy our customer that you must also pay your vendors as well during this difficult time. Tell them you understand their predicament and advise them that they can make payment via credit card or perhaps, if better suited to their needs, via a scheduled payment plan. Ask them which protocol works better for them and then proceed to work out the details of either credit card payments or an acceptable payment schedule for both you and your client.
THE PROFESSIONALS YOU CAN TRUST TODAY AND EVERY DAY
For more information and insight on effective collection protocols, or for assistance with any of your financial service needs, reach out to one of our team members today. From bookkeeping and accounting, to payroll services and even QuickBooks training, our team handles it all. The specialists here at Tax Alternatives are on hand to assist with all your small business financial needs and to help your business stay afloat during even the most challenging times. We look forward to serving you and send along our blessings for the continued safety and well-being of you and your family during this unfortunate pandemic.