Here is a strategy I have used successfully in helping a variety of companies turn their accounts receivable into cash faster. It especially applies when you sell to large companies on credit.
Teach your people to look at the whole accounts receivable process as more about expediting than collecting.
Sounds like a small distinction doesn’t it? However, it can make all the difference in how well, and how fast, you collect from your larger customers/companies.
It’s easier for the people calling customers to do it. It feels better to them. It feels better for the customers too. They don’t feel like your company is trying to beat them up. Especially given the fact that they probably know they may be a bigger company than you.
Getting paid faster is smart
It will help drive your DSO down. The result is more cash in your bank account (and fewer bad debts).
Most people think about collecting as being a hard-nosed, demanding approach to making someone pay. That’s true in some cases but with most businesses, especially larger ones, that approach is counter-productive.
The mindset of expediting helps position your people to make sure the invoices you are submitting will most efficiently flow through the customer’s approval and accounts payable process smoothly.
That’s the secret to getting paid faster when you deal with larger companies.
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