always chase new debts first

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always chase new debts first

There are many myths surrounding the effective collection of accounts. This is one of the main ones.
The Myth:
Focus on the oldest and largest accounts first to collect a lot of money quickly.
The Fact:
The “fast money” in ALL practices and businesses is in the current fees and those that are just overdue.

Most people think that to collect as much money as possible as quickly as possible from the Aged Trial Balance you should focus on the oldest and largest accounts first.    WRONG!!

Why? Because … the ‘fast money’ always lies in the newest accounts. Think about it for a moment. By their very definition, it took your old accounts a long time to get ‘old’. Some clients have got used to not paying your account. It’s almost as if you’ve trained some of them not to pay you because you haven’t been following them up to pay! So, it’s going to take you a while to un-train them.

And the largest accounts are – well, how can I put this – LARGE! And this is going to be easy to get these clients to pay you these large and old amounts quickly? I think not. Especially if you’ve already trained them NOT to.

No, the ‘fast money’ is in the accounts that have just fallen due to be paid. And it’s part of the re-education of the client body as well. Training them to pay your account when it’s due. Not someone else before you. So, that’s where most effort should be initially given.

Check these posts as well.  Same Point.
turn the taps off 
Another myth.

By | 2018-07-05T05:27:54+00:00 April 2nd, 2011|techniques|0 Comments

About the Author:

Have you ever wondered why a client does business with you and then ignores your invoice like they had no intention of paying it in the first place or they treat you like their own personal line of credit, leaving YOU dangling, waiting months for their payment? Unfortunately this situation is all too common and can even be puzzling for the most experienced business owner. If you’ve ever had to handle outstanding accounts or you are just so over non-payers, then we can help. Real-world skills, solutions, tips & strategies to get more accounts paid on time, and, most importantly, how to maintain customer goodwill while keeping YOUR cash flow in the positive. You will find the blog posts helpful but to get real results, contact us by using any of the forms on this site, by email or by phone. I’ve been involved in the management of accounts for over 30 years, heard every excuse in the book, can spot a non-payer at 20 paces. Finance Companies in the 70s (systematic, tough), professional firms in the 80s (no systems, too gentle) and, since then, just about every other sort of business you can think of. I’ve written books on the topic, spoken all over the place about it and the blog in this website is my way of “giving back”. I hope you find it helpful.

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