Given administrative theory’s many concepts for collection management, we tried to simplify the top 5 best practices for managing accounts receivable.
1. Proactive strategy
To prevent delinquency problems, these are some of the activities that every business can do: from SMEs to large corporations. In all cases, this is a preventative practice, much cheaper than late payments:
A. Educate customers
Through various means of contact (mail, telephone, personal attention, etc.), it is important to inform customers about aspects such as:
- Benefits of timely payment
- Understanding payment schedules
- The most accessible means of payment (among others, bank transfers, cash payments, and credit cards)
- The costs you incur if you don’t pay on time
That’s it! All experts in collection management advise clients to know those collection fees are transferred to them, either in the form of interest or commissions for untimely payments.