Cash flow is critical to the success of a small business. At Merovitz Potechin LLP, we understand the time sensitivity of your invoices and accounts receivable and the importance of collecting quickly. Here are some tips to help small business operators collect money on time, all the time:
- Have a system in place that alerts you to when receivables are 30, 60 and 90 days old.
- Don’t wait until receivables are outstanding for 90 days before you start collection efforts.
- The longer you wait, the less likely you will be able to collect.
- Be firm in asking for payment, and make your request(s) in writing. You supplied a service or product, and you are entitled to be paid promptly.
- If your client indicates that it cannot pay an invoice or receivable in full, obtain a specific commitment in the form of a repayment schedule and ask your client for a series of post-dated cheques.
- Ensure commitments to pay and acknowledgments of indebtedness are in writing.
- If your client does not meet an agreed payment arrangement, follow-up promptly.
- Keep written records of your collection efforts.
- Always be professional. It might help you retain a valuable customer relationship, especially where the customer may just be facing temporary financial troubles.
Facing a situation where these tips haven’t helped? Our insolvency and collections team is ready to help you. To consult with a member of our firm confidentially, please email us or call 877-612-1123.