SCORE Small Business Blog

How-To Collection Tips

Getting paid in business can make the difference in being profitable or, in some cases, being put out of business. Receivables need to be managed and are always a struggle as no one likes asking for money. Here are some tips to get customers to pay.

1. Offer a discount to customers who pay within 10 days 1% or 2%
2. Ask customers to pay a portion of the invoice when service is rendered or an order is placed
3. Personally make calls to customers who owe money
4. Delegate a person within the company to make calls
5. Send out friendly reminders
6. Offer incentives or rotate stock if inventory is sitting
7. Credit card payments should be encouraged. It is known that customers will purchase more if a credit card can be used. Know that credit card fees can be negotiated. Contact more than one company to compare rates.
8. If you have to hire a collection agency always negotiate the fees it can run as high as a third.

Good Luck and please share things that have worked in collecting money in your business.

Julie Brander – Business Mentor, SCORE New Haven Julie has been a SCORE volunteer since 1997. She has 20 years of experience in business, starting a manufacturing, wholesale and retail jewelry company. After selling her business, she dedicated herself to helping other entrepreneurs start and expand their business. www.scorenewhaven.com | @juliebrander | More from Julie