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Accounts Receivable and the Email Problem

Accounts Receivable and the Email Problem
Pat Dickson - Fri Mar 23, 2012 @ 07:23AM
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I've helped many businesses reduce their over 90 receivables by 30-50% by doing only one thing. It is simple. It isn't rocket science. In fact, it takes a little bit of the science out of the equation.

Take email access away from everyone in the collections department and make them use the telephone.

Did you really hear what I just said?

Take email access away from everyone in the collections department and make them use the telephone.

My wager is some of your receivables keep getting older because your employee responsible for collecting has never made contact with/asked the right people to pay. How? Why? Because all your employee has done is send emails. "I send them 3 emails per week," is the answer you receive. Oftentimes, the email address being used is no longer good. E.g. it belonged to someone that's been laid off, quit, was promoted, etc. In short, no one responsible for paying you, or willing to take responsibility for paying you, is receiving your company's demands for payment.

However, this can be remedied by picking up the phone! This way you only deal with live people, confirmable contact is established, and, in my opinion, the people you contact feel more personally responsible for paying you than they would have had they only received an email.

Try it and see. Take your top 10 delinquent accounts, pick up the phone, and make phone calls on each account until you have achieved live audio contact with a person willing to admit responsibility for making sure you are paid. Get them to commit to a payment amount and date. If there are problems with amount or payment date, find out what they are and how you can immediately remedy them. Then, and only then, get this person's email address. Write them an email confirming all the details of your discussion and ask for them for an acknowledging reply. If they don't reply within 24 hours, call again and ask if your email was received, and once again review all the details, confirm payment amount, date, and if there are any pending issues.

Give this approach a try. It won't hurt. It will likely substantially improve your past due aging. You may ask how something so simple is often overlooked, and all I can say is that it took me 20 years of industry experience and a Masters Degree in Information Systems to realize sometimes clicking and clacking at a keyboard and losing touch with humanity isn't always productive or efficient. In fact, the more we advance into the future, the more I'm finding problems with productivity and efficiency are connected with the actions of robotic employees not thinking past their computer screens. Sometimes, when you get the mentality your job begins and ends with your computer, you leave the people out.  

Pick up the phone and ask for the money!

Comments: 0