Accounting procedure to improve collections
On Friday I met with an accounting client who manages a medical clinic. Among other things, we’ve been working on improving the rate of collections from their customers. A previous manager had really let the billings, and overall attention to A/R, get out of control.
I’ve always said that if you have clients that owe you money at the end of any given month, one of the simplest things you can do to improve the speed and success of collecting your money is to send out a statement. This particular client was doing that, but since it had never been done before, many of their customers were ignoring the notices.
She started putting these orange stickers on every monthly statement that was over 60 days, and the money has been flowing in ever since. Since we also take care of the accounting, I can attest to the improved cash flow. It’s been a remarkable change in the past couple of months.
If you want to improve your cash flow, you should consider using a variation of this orange sticker, or perhaps the red stamp below. It’s easy, it get’s the attention of your customers, and it works.
If you’ve tried anything similar, I’d love to hear about it.
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