Successful Bill Collecting Begins with Information

Regardless of the economy, there will always be customers who don't pay their bills on time.

Your efforts are complicated by your unique relationships with customers and the responses they have to different collection strategies. To improve results, consider customizing guidelines for each account.

These guidelines help your billing department balance its collection efforts with your company's relationships with customers.

Make sure that each customer file contains the following information:

• Your relationship with the customer, its importance and its history.
• Customer contacts, including all the names, addresses, e-mails and telephone numbers. One major reason why bills go unpaid is because they are sent to the wrong address. Update your database of contact information regularly.
• A complete history of sales and payments. The payments history should include both those that were on time and those that were late. Add notes about previous collection efforts — what succeeded and what failed. Also, include a list of the discounts the customer has received.
• Projected sales and collection cycles for the customer's business, as well as any data and forecasts for the industry. Include information about each company's accounts payable contacts and process.
• A risk or relationship rating assigned by your company.

The more documentation your accounts receivable managers have, the better they can adapt their tactics to individual customers. The result is likely to be a higher rate of success.