Ten Tips For A Good Billing And Collection System

Guest post by: Alvah Parker
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How To Be Happy at Work? Acknowledge Yourself - By Alvah Parker

Cash flow is critical to any professional service firm but especially small ones. How do you prevent clients from delaying paying their bills or worse not paying at all? Here are 10 tips:

1. Establish ground rules during the initial appointment with the client. If you don't have a written payment policy, now is the time to write one. This policy should then be reviewed with the client in the first meeting. Include in the policy when payments are due and how overdue bills will be handled. Give the client a copy of the policy. Make sure that the client understands his/her bill payment responsibilities and agrees to them.

2. Offer different payment arrangements to make it easier for clients to pay. If you do not accept credit cards, now is a good time to consider doing so. By billing to a credit card you get the fee immediately and the credit card company has the collection problem if there is one.

3. Consider offering a discount for early payment and/or a penalty for late payment to encourage on time payment. This should be discussed at the initial meeting (It should be in the written payment policy.) and might be enough to persuade the client to pay early or at least on time.

4. Know the client's bill payment process. Keep a record of the telephone number and name of the person who pays the bill for the client. If you do need to contact the client about the bill and are able to reach some agreement then you will know how to reach the bill payment person (often someone other than the client) to see if the check has been sent.

5. Call the client if the bill is more than 5 days overdue. Letters are not as effective as calls especially since you've been billing the client by mail and the client has not taken action. Sometimes just hearing your voice will inspire the client to put your bill on the top of the stack. Under no circumstances do you want to continue doing work for the client until the bill is paid. This is often difficult to manage when you are in the middle of the work but it can give you leverage with the client.

6. If you decide to send an overdue bill notice to the client, send it priority mail in the red and blue envelope from the post office. It will stand out, get more attention than regular mail and most likely be the first piece of mail the client opens.

7. First calls on an overdue bill should be just friendly reminders. Ask if you can expect the payment by a particular deadline. Call the person responsible for paying the bill on that deadline so you know immediately if client has lived up to his/her agreement.

8. If the client tells you he/she is having financial issues, try to work out a payment plan with him/her.

9. With accounts 90 day or more overdue decide if you are willing to write off the bill or if your next step is to send the bill to a professional collection service.

10. If you decide to use a collections service (you get at least part of your fee), let the client know in writing that you are going to do that.Tips for a Good Billing and Collection System

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How To Be Happy at Work? Acknowledge Yourself - By Alvah Parker

About the Author: Alvah Parker

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Alvah Parker is a Practice Advisor (The Attorneys’ Coach) and a Career Changers’ Coach as well as publisher of "Parker’s Points", an email tip list and "Road to Success", an ezine. Subscribe now to these free monthly publications at her website http://www.asparker.com/samples.html and receive a free values assessment. Work becomes more meaningful and enjoyable when you work from your values. Alvah Parker began her career as a high school chemistry teacher. She later transitioned to a sales career at AT&T. As a Sales Professional at AT&T for 15 years she was elected to the prestigious Counsel of Leaders for the top 3% of the sales force. After leaving AT&T she transitioned into a coaching career. Alvah is a senior coach for Boxwood Technology where she coaches association members on career issues and also a SCORE Business Counselor where she advises and counsels small business owners. Parker’s Value Program© enables her clients to find their own way to work that is more fulfilling and profitable. Her clients are attorneys, entrepreneurs, managers and people in transition who want to find work that is in line with their own values. Alvah is found on the web at http://www.asparker.com. She may also be reached at 781-598-0388.
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