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first in = first paid

This is an excerpt from a monthly report to one of our clients.

* Follow up is too slow
* Please consider allowing reminders to be sent earlier than they currently are.

To explain: The firm grants clients a period of 14 days within which to pay. This is clearly stated on all fees received by clients. A fee raised on 30 January, therefore, should be paid on or before 14 February. Under present circumstances, however, a reminder would not be sent to such clients until 15 March (approx) – 4 weeks later than it was supposed to be paid! In other words, 42 days (approx) after the date that the fee was sent. The firm is “training” clients to pay later than we ask!

Please consider accepting the following change:
* 14th of the month following – “Permission Please” emails circulated to all Partners
* 21st – reminders sent (emails or letters)

Where this change has been made elsewhere,
* Few clients noticed any change at all! Those that were going to pay paid anyway but, more importantly, those that were not going to pay were reminded much earlier.
* Partners were still able to withhold permission, several stated on their “Permission Please” email when reminders could be sent.
* This simple change helped to arrest the ‘drift’ of accounts from current to 90d+ which was reflected in the reported results several months later.

This alteration has always been effective elsewhere because the “fast” money in all businesses is always generated from new invoices raised. Easiest to collect and trains clients to pay more closely to trading terms.

****UPDATE: Use the “Permission Denied” approach.****

By | 2017-10-05T05:44:16+00:00 January 19th, 2011|miscellaneous|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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