Spring and Summer is the high season in many industries. During that period, businesses brace themselves for the administrative and operational challenges that go with making the most of their year’s most potentially profitable months.
Unfortunately, it’s at the end of the high season that we see many Accounts Receivable issues that arose because of the change of focus. There are some easy ways to decrease the occurrences of delinquent debt that pop up as the nights grow longer…
- Do your best to ensure your credit applications are being filled out properly– A signed credit application can ensure that you will receive your interest on late payment if you ever need to enforce the debt and that, if your customer becomes hard to reach, you have the information that gives you the best chance of finding them.
REMEMBER!! Regardless of what interest rate you put on your invoices, without a signed agreement you are only entitled to the Provincial Judgment Interest Rate, which was only 0.85% in 2010 and 1.85% in 2011- per an um. Compare that to the 12% you’d receive with the Schel Credit Application (not to mention our unique indemnity clause), and you’ll quickly see that your costs of collection can be seriously offset with this simple precaution!
- Photocopy customer cheques when you can! — a quick photocopy of your customer’s cheque can take some of the headache out of enforcement, should the need arise! Valuable bank information that can be used for garnishees will be at your fingertips.
- Follow up verbal payment arrangements with an email, preferably with ‘read receipt’– any acknowledgement of the debt by your customer within the first 2 years can be used to extend your statute of limitations. Save these emails.
- Make use of Schel’s Receivable Management tools!!– during your busy season, Schel’s courtesy letters, demand letters, and administrative assistance can keep your A/R’s from slipping through the cracks.
After your customer fails to respond to your efforts to communicate regarding their account two times, the likelihood success decreases EXPONENTIALLY! A well timed, polite reminder from Schel or our lawyer’s demand letter can quickly move your invoice to the top of the pile, which is where we are proud to keep our clients.
Our system is often over 95% successful, with costs of less than 5% for ALL collections, including litigated files, when used as recommended.
Combine that with the hours previously spent trying to chase down unreceptive customers and the cost of having your cash flow interrupted, and you’ll find that using Schel can be almost like making money! ; )
Tags: receivables credit overdue a/r's schel management tips debt collection
