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FOR IMMEDIATE RELEASE
Demanding Payment the Right Way
Lohman Company, PLLC Reveals 6 Ways to
Collect Pending Invoices
July 8, 2008 -- As the economy continues to tighten,
businesses should be focusing on cutting costs and reevaluating the
revenue stream. This may seem obvious, but collecting pending invoices is
the easiest way to increase cash flow and could mean the difference
between success and failure in today’s business environment.
According to Jay Lohman, CPA and President of Lohman Company,
PLLC, it is critical that businesses review accounting policies
and adjust during market shifts.
“Too many business owners don’t want to jeopardize good
business relationships by being too 'demanding' when it comes to
payment. But that is a huge mistake,” commented Lohman. “There
is nothing wrong with asking for payment of services rendered.”
Lohman advises that business leaders be clear and upfront at
the start of a business relationship to ensure timely
payment-in-full from clients. “By being straight-forward about
your expectations in regard to payment, your clients will think
twice about delays or disputes,” says Lohman. “They will
actually respect you more.”
Lohman offers the following tips when trying to tighten
payment practices and collect pending invoices:
- Send Invoices out Sooner – If you’re
seeing a lull between when you send out your invoices and
when you receive payment, send your invoices out sooner.
There is no reason to wait; send your bills out as soon as
the service is rendered. The sooner your clients have an
invoice in hand, the more likely they are to pay. Also, add
payment terms prominently on your invoice such as "Payment
due within 14 days," including the specific date. That way,
you have reason to call your contact at the client's office
sooner rather than later to check on a payment. Once a
client hears you say the check is late, that's usually
enough to warrant a call to accounting and the likely
processing of your check.
- Talk to Clients – Most people can
ignore an invoice, but a personal phone call is harder to
forget. Give your clients a call and talk to them about
your payment schedule.
- Variety of Payment Plans – People like
options. Offer a variety of payment plans that work for
your clients. This will make them feel at ease and thus
more likely to pay on time and in full, based on their
payment plan. Provide incentives for faster payment, such
as a percentage savings on the total invoice if paid within
5 days.
- Rework your Invoice – Be sure the
language in your invoice isn’t too generic or safe. While
all invoices should include the client contact's name, the
invoice number and the date the invoice is due, don't stop
there. Let the client know in writing that they may be
charged an additional 5- or 10-percent penalty for late
payments. Also, most people like to see an itemized list of
services. Stating the specific project that you worked on
simply reminds clients of what they are paying for.
- Write-offs/Uncollectible Debt – A
thorough review of accounting may reveal some pending
payments that are unlikely to be paid. This uncollectible
debt should be cleared from your records and refigured as
company write-offs.
- Pay it forward – · Asking
clients to pay up front or pay a monthly retainer for
services rendered makes the payment process
straightforward. Don’t be afraid to ask…you might be
surprised by how many people say yes, especially if they get
a reduced rate or more services for their money!
Remember, everyone wants to get paid for their work, so
don’t sell yourself short. If you earned it, you can demand it.
For More Information Contact:
Lohman Company, PLLC
Stapley Center
1630 South Stapley Drive, Suite 108
Mesa, AZ 85204
Phone: (480) 355-1100
Fax: (480) 355-1130
Internet:
info@lohmancompany.com
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