Before outsourcing your account receivables to a debt collection agency, it would help to minimize the accounts as much as you can, to be able to obtain a clearer picture of the situation.
This requires a proper strategy with systems, technology and processes in place.
It’s not as intimidating as it sounds, don’t worry. Our expert debt collectors at Partners In Credit have put together some useful tips that would help you manage your accounts receivables portfolio.
Differentiate Between Desirable and Undesirable Accounts
Proper, extensive portfolio analysis would reveal helpful information about your customers. You should be able to rank your accounts receivables on the basis of their risks of defaulting and other such relevant factors.
Keep your sales departments in the loop regarding your top and bottom accounts, so they can maximize their efforts on making long-term customer relationships with potential low risk clients.
Financial Ratios and Metrics
Use key metrics and financial ratios to help evaluate your accounts receivables. Compare current Days Sales Outstanding to the best possible Days Sales Outstanding; analyze your accounts receivables for their aging, risk profiles, dispute resolution performance and ability to follow up on payment promises.
These evaluations will assist you in assessing the levels of asset turnovers, risk and asset quality for the overall financial health of your company.
Look Out For Under Performing Accounts
Refuse to entertain clients who don’t pay on time or are extremely uncooperative about payment terms. Focus your resources on clients who do make timely payments and decline or tighten your credit policy for those who don’t.
Motivate your Staff to Make Collections
Link accounts receivable to your employees’ compensation plans by rewarding them for any actual collections they make. This gives them incentive to work toward eliminating bad debts.
You could also introduce bonus payouts upon employees’ contributions toward improvements of timely payment collections.
Use Efficient Software
Keep up to date with the newest and most efficient technology. Working with specialized software to maintain your receivables can benefit you in terms of efficiency, minimizing errors and time consumption.
Automate functions that are repetitive, like creating invoices. Use templates for follow up emails and credit policies to avoid spending time on the same tasks over and over again.
As a credit manager, make sure your entire company is aware of the terms on the credit policy and that they are enforced. This helps reinforce the importance of debt collection and maintains the implementation of the credit policy without compromise.
Hire Partners In Credit for Your Company’s Debt Recovery
If all else fails and those stubborn receivables refuse to cooperate at all, don’t worry, let your Partners In Credit take over!
With over two decades of experience as a leading company in the debt recovery industry, we know all the tricks and techniques to recover outstanding debt.
Alongside developing customized solutions to help credit grantors, our services also include first party, primary to debt warehouse collection of accounts, trace services, legal services, and any other assistance you might require to help you recover your debts. For more information, email us at firstname.lastname@example.org or call 1-888-730-6333.