Best Practices for Collecting on Stale Accounts
As you run your business, it’s completely normal to deal with a few stale accounts. Life happens and sometimes your invoices (and invoice reminders) fall through the cracks! While you’ll never completely prevent it, there is plenty that you can do to mitigate it. NCS has been conducting Accounts Receivable Management for our clients since 1992. In that time, we’ve seen and dealt with just about every situation you can possibly imagine. In today’s blog, we’ll discuss some examples, best practices, and takeaways for handling stale accounts receivable.
Don’t Make Assumptions!
Just because an account has gone stale doesn’t mean that your client has abandoned you! Between revenue issues, infrastructure problems, and simple misunderstanding, honest clients will fall behind at times. Compound any of these with miscommunication and you have a recipe for a stale account. For that reason, you should never make assumptions about the ease of collecting. A great starting point for troubleshooting an issue with stale accounts is to review your own systems. Take a step back and try to view the situation through someone else’s eyes. Are your payment methods easy to navigate? Has your communication with your stale clients been completely clear?
A good rule of thumb is to remember to let the customer pay you! If one method of collecting isn’t working, offer to work with your customer. Often you’ll be able to collect if you let them pay on their own terms.
Ensure That Your Operations Are Running Smoothly
Inconsistency, rocky operations are a common issue in accounts that go stale. Simply put, if they don’t know what to expect, how can you expect them to pay promptly? This is one reason that companies often work with 3rd party AR Collections Firms. A 3rd party can smooth over difficult internal situations such as staff turnover. This ensures that collections aren’t left to chance or subject to error.
Look For The Silver Lining
While it’s never a good thing for an account to go stale, it can represent an opportunity. For example, once the account has been settled, they are now free to work with you again! As an excellent example from NCS’s own case studies, we once worked with just such a client. They came to us with an enormous stale account that they needed our help to settle. Once we had done so, the client was able to work with them again. Not only that, but they were able to upsell their services to this client! Thus, our client was able to generate significant revenue simply by allowing a seemingly difficult or nonexistent relationship to evolve.