When you provide a consumer service or product, you have the legal and moral right to be paid within contractual terms. Consumer accounts not paid within your payment terms can restrict your cash flow, business growth and in some situations, the ability to continue operating your business.

The following consumer collections report outlines 11 guidelines you can follow to increase the amount of in-house consumer collections your business collects.

1] Have a Defined Credit and Consumer Collections Policy

One of the major causes of overdue receivables is that a business has not defined to its consumer customers and staff when accounts are to be paid. If consumer customers are not educated that accounts are to be paid on time, then chances are they’ll pay late or sometimes not at all. Make sure that your company’s terms of payment are clearly stated in writing to each consumer customer.

2] Invoice Promptly and Send Statements Regularly

If you don’t have a systematic invoicing and billing system, get one. Many times the consumer account hasn’t paid simply because they haven’t been billed or reminded to pay in a timely manner. This situation usually occurs in smaller or newer businesses where they’re short on staff to invoice and bill.

3] Use “Address Service Requested”

One of the most difficult collection problems is tracking down a consumer customer who has “skipped”. All businesses should be aware of a special service offered by the Post Office. Any

Q: I just discovered that for the past six months I have been billing a client half of what I should have been. Should I just include the total of the past due balance on his next bill or contact him first to let him know that it’s coming? This client has been difficult in the past, so I’d rather not deal with him until I absolutely have to. My partner, on the other hand, thinks we should call the client and let him know what’s going on before sending the bill. What do you think? — Louis K.

A: I think your partner is right. If you think this client has been difficult to deal with in the past just wait until he opens your bill with six months worth of arrears attached to it without prior notice or a full explanation of the amount owed.

Sending such a bill is like dropping a bomb on the client’s desk, and I guarantee you the fallout from the resulting explosion would end up landing squarely on your head.

So the question then becomes, how do you collect money that is rightfully owed to you from a client who has a history of being difficult? That’s easy, Louis. You make your partner call him.

Seriously,

Historically, there have been unavoidable situations that test an agency’s client relationships. Today, there are tools that can minimize, or even eliminate these threats.

As an example, one situation that plagues all relationships is the unexpected surge in project cost.

Its an old story. You send your client an invoice that is 30% higher than the estimate. The client goes nuts. Your response is that the copy was changed thirteen times in two days. And THEN there were the layout changes . . .

Nobody is happy. Your client really doesn’t think they made all those changes, and after-all, you’re

When starting a business, you have to determine the method you are going to use for accounting and paying taxes. The two choices are the cash method and the accrual method.

Cash Method

If you are looking for simplicity, the cash method is probably your best accounting choice. Generally, income and deductions can be claimed when payment is actually received or made. This is best shown with an example.

I open a small business and have to order business cards and stationary. I receive the products

Managing cash flow is the number one reason that businesses, particularly small business, fail. Eight out of ten businesses fail, and nearly two thirds of those businesses claim cash flow or cash management as their main problem. Considering that 5 million businesses open up annually in the US, that means 4 million a year close their doors, and over two and a half million of those shut down because they desperately needed cash to solve a short term problem.

It’s not all that hard to see why. Say you close a deal, a huge one for your company. How about a half a million dollar sale with 50% profit? Sound good? You close the deal in January and perform the work in February and March, the problem is, your company doesn’t get paid until June. Not only do you not get to spend the profit, your company is out a quarter of a million dollars in hard cost for several months. What happens if something goes wrong? How do you pay