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Get Delinquent Bills Paid |
Every business has trouble getting some customers to pay. So what's the best way to handle this day-to-day annoyance? Companies typically turn to collection agents and attorneys and pay them around 25 to 30 percent of the amount retrieved. But you can shave this cost by using a "dunning service."
This may sound intimidating but it's merely a computer service that turns out dunning notices. There's no collection system other than the notices. No one calls or takes your customers to court.
For approximately $15 including postage, dunning services send several messages. Think about it. If there are a hundred pieces of mail on your desk, wouldn't you open the dunning notice first because it comes in an official-looking telegram envelope?
Using a dunning service gets attention and results. You may find that about 50 percent of your delinquent customers pay you after receiving these notices. And later, you can always turn over the accounts that don't get paid to a more expensive collection attorney or agency.
Another tip: Try to save on a collection attorney by negotiating for a lower rate. Attorneys may initially ask you to pay 25 to 33 percent, but some settle for 15 to 20 percent - a significant rate reduction.
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Want to Get Paid Faster? In today's competitive business world, you need to take advantage of every weapon available. Even a psychological advantage can be important.
If you don't already provide postage-paid, pre-addressed envelopes to your customers, you might want to give it a try. Many companies discover that when they supply the postage and envelope, their invoices get paid faster. There's a perceived benefit associated with the convenience.
Of course, it can be difficult to justify the cost of providing return postage. This is especially true if you're sending out thousands of invoices to one-shot purchasers who might never buy from your company again. But if you mail out statements to the same group of customers on a regular basis, it can create goodwill and improve cash flow. |
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