The Collection Process

Spending or investing cash can be a fun exercise. Collecting cash, however, is often an undesirable activity for small business owners. Wearing the hats of sales agent, service provider, and bill collector might feel contradictory at times, but the collections process can be systematic and organized to enhance client relationships. It actually provides regular opportunity to be in touch with the client.

Prior to beginning an engagement, the payment terms should be clearly outlined in writing and agreed to. Clear payment terms need to be established up front in the price listed, contract, or engagement letter. Invoices should also indicate precisely what the terms are, including late payment fees and the timeframe for receiving payment. If it is a retail establishment, the refund policy should be clearly noted for all customers to see. The establishment of clear terms and timely follow-up should limit the amount of write-offs in your company.

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