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Commercial Clients Acct. Rec.
Tom_35
Member Posts: 265
When we have exhausted all other methods, we have started sending multiple faxes on a daily basis to the customer. Just program your fax machine to send a fax every 30 minutes or so. Your past due statement arriving 15-18 times a day will get their attention.
Uses their paper, ink, and phone lines and your cost is negligible. We used the mail first, but the fax is much cheaper and you can have many more copies sent.
They will remember your name.
Tom Atchley
Ft. Smith, AR
Uses their paper, ink, and phone lines and your cost is negligible. We used the mail first, but the fax is much cheaper and you can have many more copies sent.
They will remember your name.
Tom Atchley
Ft. Smith, AR
0
Comments
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What are your Acct Rec. policies?
I note that I am servicing my commercial customers and what is happening is they are dictating when the accounts will be paid. Ex: 30/60/90 days. Usually I require check within the 30 days. Some are submitting checks at 45 and 60 days. While I know the money is there, I find myself using my company money to finance the overage. Am I a Bank??? What to do? I know the money is there and will be sent, but when I get into 10,000+ in recevables, It hurts because my vendors want their money in 30 days, no excuses. Any thoughts welcome.
Mike T.0 -
We get that too from clients
on the design side of things. The old saying that when you owe the bank a hundred grand they own you. When you owe the bank a billion you own them.
I suppose the cost of doing business (short term cash flow bridge loans) could be built into your fees for service but at the risk of losing to competition. Or you eat the delta as a CODB.
The carrot/stick approach: Fee is X (the higher amount covering interest) but will be reduced 1.5% or whatever if paid before such and such a date.
The stick approach would be like a bank late fee. After this date, the balance is X+___%.
If your vendors take no excuses, how do you deal with that? You pay. Why not ask them how they do it? You understand, maybe (hah!) your customers will also.
Way too common an occurrence.
My $0.02,
Brad0 -
A Lot...
... of industrial accounts are like that, as well. Many of these operations have central accounts payable departments that can easily be thousands of miles from the site of the work. (I'm in Canada, and there are a couple of plants that pay me out of a US office.) They have their procedures, and little outfits like mine aren't going to change them. We just mark up the material & labour to compensate accordingly. I can't see where there's much else you can do.0 -
Cashflow
You need to be one of those "no excuses" vendors, or better yet have a clerk with the tenacity of B'nai Brith. Calling the customer (or their payable's dept or clerk) every single day when they are past due can work wonders. Best that it not be you directly that calls and then you can be the good cop and blame corporate policy or that person! ;-)
As we all know, every business will try to maximize cashflow by extending payables and keeping the receivable days to a minimum. Some businesses will deliberately pay late (and then phone with an excuse to waive the finance charges), others will pay only when due; almost nobody pays much before the due date.
In my experience, most businesses will opt to take a discount when it is available. Even small discounts may work wonders. The key thing is to make the customer realize you aren't the bank and have contracts and invoicing that clearly spell out the terms so that it makes it easy for their clerk in payables to know when it "should" be paid.
A small discount rate for 10 days and a big nasty for unpaid balances works nicely. Most payables clerks are instructed to aim for taking advantage of the discounts.
When the owner is struggling financially, not getting your early discount is often a cheaper course of financing for them than anything else. It's nice to know when this is the case because they are often raising a red flag for you. Then it's best to be as close to C.O.D. as possible next time because if they go under you'll never collect a dime. I've worked at places where as soon as a vendor didn't take the discount, the sales people would be alerted and they'd check to find out why from the buyers and their competitors. If anything sounded fishy - it would be COD. (pardun any puns)0 -
EXPLAIN?
> You need to be one of those "no excuses" vendors,
> or better yet have a clerk with the tenacity of
> B'nai Brith. Calling the customer (or their
> payable's dept or clerk) every single day when
> they are past due can work wonders. Best that it
> not be you directly that calls and then you can
> be the good cop and blame corporate policy or
> that person! ;-)
>
> As we all know, every
> business will try to maximize cashflow by
> extending payables and keeping the receivable
> days to a minimum. Some businesses will
> deliberately pay late (and then phone with an
> excuse to waive the finance charges), others will
> pay only when due; almost nobody pays much before
> the due date.
>
> In my experience, most
> businesses will opt to take a discount when it is
> available. Even small discounts may work wonders.
> The key thing is to make the customer realize you
> aren't the bank and have contracts and invoicing
> that clearly spell out the terms so that it makes
> it easy for their clerk in payables to know when
> it "should" be paid.
>
> A small discount rate
> for 10 days and a big nasty for unpaid balances
> works nicely. Most payables clerks are instructed
> to aim for taking advantage of the discounts.
> When the owner is struggling financially, not
> getting your early discount is often a cheaper
> course of financing for them than anything else.
> It's nice to know when this is the case because
> they are often raising a red flag for you. Then
> it's best to be as close to C.O.D. as possible
> next time because if they go under you'll never
> collect a dime. I've worked at places where as
> soon as a vendor didn't take the discount, the
> sales people would be alerted and they'd check to
> find out why from the buyers and their
> competitors. If anything sounded fishy - it would
> be COD. (pardun any puns)
0 -
EXPLANATION PLEASE
I don't understand your reference to "B'nai Brith". What are you trying to say? Clue us in please.0 -
It is
a tenacious and admirable organisation, that's all.
Brian.0 -
Tracking Down Nazi War Criminals
B'nai Brith is a Jewish advocacy group and their ability to track down Nazi war criminals wherever in the world they were trying to hide is legendary.
Have you never heard of this organization before?0 -
Forgot to mention...D&B
Dunn and Bradstreet financial services, sort of a clearinghouse, a credit agency for businesses. Very useful when taking on new clients. Over-leveraged contractors show up there, why not clients?0 -
Appreciate the feed back
Some of my customers are a fortune 500, but that's besides the point. I dont want them to say,..."If you are not accepting of our terms, we'll look elseware". I am all most comming to the conclusion that the big names should be dropped if for nothing at all, their attitude or lack there of. I wish I had the answers, but I don't. I am getting the ATTITUDE that my smaller customers (which are just as important and pay on time) deserve even a higher degree of service than I already provide. Contract customers come first, but I am now re-thinking that money comes first. That goes against everything I believe in as a service company. Service and satisfaction comes first, money follows but what if I am dissatisfied??? On the Fence on this one. I am just pissed enough to do something stupid...:)
Mike T.0 -
Mike,
> Some of my customers are a fortune 500, but
> that's besides the point. I dont want them to
> say,..."If you are not accepting of our terms,
> we'll look elseware". I am all most comming to
> the conclusion that the big names should be
> dropped if for nothing at all, their attitude or
> lack there of. I wish I had the answers, but I
> don't. I am getting the ATTITUDE that my smaller
> customers (which are just as important and pay on
> time) deserve even a higher degree of service
> than I already provide. Contract customers come
> first, but I am now re-thinking that money comes
> first. That goes against everything I believe in
> as a service company. Service and satisfaction
> comes first, money follows but what if I am
> dissatisfied??? On the Fence on this one. I am
> just pissed enough to do something
> stupid...:)
>
> Mike T.
0 -
Mike,
my wife runs a 50 million dollar company and she is on both sides of this issue.
The companies they invoice have strict payment policies and the ones she deals with must accept her terms. The one thing her accounts payable department will do is listen to individual requests and they have set up quicker payment schedules for small sub-contrators who perform.
Have you gone in and spoken to the person who puts the bills through and discussed your particular situation? Going to the right person with the appeal coming from the owner may go a long way.
You're in a tough position and I wish you the best,
Jack0 -
I used to cut people off after 60 days...
but then I had several thousand customers at $20/mo. You can't do that. One thing I have advised people in your situation to do is to include a "pain in the butt" charge in the bill. Of course you don't label it as such and you don't make it a separate line item, you simply charge the slow-pay customers more. In your case, if you are marking up parts mark them up to 100% of list price, or maybe make your per your labor charge a couple of bucks higher per hour. Like the other poster, said maybe you can offer a prompt payment discount or charsge a service charge for late payments. I don't like this system as it is abused - non-prompt payers still take the discount and you invariably wind waiving the service charge to get the invoice paid. This system also makes a mess of your bookkeeping - you wind up writing a lot of credits to bad customers.
If you don't take credit cards this might be something you should look into. I know it costs money but many large corps let employees have purchasing cards these days. If your customer has this system maybe you can use it. Another thing you might want to investigate is why your bill is being paid late. Many times this is not the fault of the A/P department but of someone that needs to approve the bill prior to it being paid. Many times maintenance supervisors etc. don't like doing this type of work and put it off as long as possible. I have also seen things as simple as the wrong P.O. Box on an invoice delay payment. It really might be worth explaining your problem to your A/P contact at the company and see what you can work out. My dad one time had a situation where all he had to do was ask and he got his check in 2 weeks instead of 6. It's not an easy one and you have to balance losing the customer against making a little less on the customer. Sleep on it a couple of days and you'll come to the right decision.0 -
i'd rather work for
a residential homeowner than a commercial business any day..
To Learn More About This Professional, Click Here to Visit Their Ad in "Find A Professional"gwgillplumbingandheating.com
Serving Cleveland's eastern suburbs from Cleveland Heights down to Cuyahoga Falls.0 -
sample letter for slow pays
Dear Customer,
It has come to my attention that you have one or more invoices which are presently past due, payment is due within 30 days from completion on all invoices unless otherwise indicated. Payment is to be made per invoice as no monthly statement is sent. Accounts past due run the risk of becoming C.O.D. accounts and as such may have service delayed or denied, hence "slow pays don't have emergencies"
Accounts that do not respond to the subtle reminders such as a phone call, 2nd invoice copy or letter may find the next reminder they receive will be a notice of a statutory mechanics lien being placed on your property or summons to appear in court
Since I have not heard from you I can only assume your failure to payhas been for no reason attributable to me.
So take a moment today, make out a check, and send the monies owed, that way we can both put this to rest.
TOTAL AMOUNT DUE__________________
(if they don't respond to the letter, next time hike the invoice price to get your finance fee up front)0 -
30/60/90 terms
I have seen really large (Fortune 100 sized) do this, say 2%30/net 75; I think it is gives them flexability as well as some income on the float, but it's a pain in the, umm, elbow -- you probably have two options, 1. No Bid them, or drop existings. 2. Quote them higher prices by say 2-4% to cover your carrying costs. It, alas, is a reality w/ large companys, hence a cost of that sector of the business. You just have to decide if you are going to play in that sector or not, and if you do, make it work for you.
OTOH, mall businesses are another story, they may normally pay on 30 day terms, but sometimes they (or even residential customers) have cash flow crunches, and may be late too occasionally.0 -
All of you are GREAT.
I know there alot of options out there and I'd hate like hell to drop any paying customers. I work the old fasioned way, (with honesty and integrity) trying to get everyone up and running ASAP. I find that when they're cold, they will do anything to get you there, but when is all toasty they get the attitude that "oh well we'll get you the check on our terms. If only we could all get together to curb the practices of SOME companies. I guess that's business. I have increased prices to reflect on the back end their tendancies.
Thanks All who replied. Mike T, Buffalo, NY0 -
communication
How about a return telephone call?
Even when they don't have the answer I'm looking for if the client returns the phone call it speaks volumes to me.
There is nothing that ticks me off more than unanswered messages. When they call we pick up the phone. Why can't they extend the same courtesy?
Keith0 -
Mike
one option we are looking at is a service, that "buys" your payables. (No not the mob!
~ )
If you have signed contracts, for a fee/percentage, they pay you right away, then collect the bill. I realize that you don't get 100% of your billables, but your cash flow will not suffer.
Leo G
To Learn More About This Professional, Click Here to Visit Their Ad in "Find A Professional"0 -
this is getting to be a bigger problem it seems monthly. On average I have about 75k in receivables, most of which are nearing sixty days. my first approach is to remind them of the excellent service they receive at a fair price. this will usually move along payment, but if not they are told that they will not be seviced until payment is in full, then at that point they must go on cod terms for a year. after that its game on which would include liens, small claims court and letters to vendors who do business with them.0
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