Tips for Improving Collections and Dispute Resolution

Collecting money is a pain in the a**. I’ve tried every fancy debt collection system. Nothing works as well as this painfully simple strategy: 𝟭. 𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹𝗶𝘇𝗲𝗱 𝗥𝗲𝗺𝗶𝗻𝗱𝗲𝗿 𝗦𝘆𝘀𝘁𝗲𝗺 Don't let automated messages do the talking. Personalize your reminders with a friendly, human touch. A simple, personalized email or call can make a world of difference in getting those overdue payments settled. 𝟮. 𝗜𝗻𝗰𝗲𝗻𝘁𝗶𝘃𝗲-𝗕𝗮𝘀𝗲𝗱 𝗥𝗲𝗽𝗮𝘆𝗺𝗲𝗻𝘁 Motivate your clients to pay on time by offering small discounts or benefits for prompt repayments. It's a win-win; they save a bit, and you get your dues faster. 𝟯. 𝗧𝗿𝗮𝗻𝘀𝗽𝗮𝗿𝗲𝗻𝘁 𝗖𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗶𝗼𝗻 𝗣𝗿𝗼𝘁𝗼𝗰𝗼𝗹 Clear, consistent communication is key. Establish a protocol for transparent communication about debts — it reduces the risk of misunderstandings. Ensure your clients know exactly what they owe and why. 𝟰. 𝗖𝘂𝘀𝘁𝗼𝗺𝗶𝘇𝗲𝗱 𝗣𝗮𝘆𝗺𝗲𝗻𝘁 𝗣𝗹𝗮𝗻𝘀 One size doesn't fit all in debt repayment. Tailor payment plans to individual client circumstances. This flexibility often increases the likelihood of repayment and ensures you meet the needs of all clients. 𝟱. 𝗥𝗲𝗮𝗹-𝗧𝗶𝗺𝗲 𝗗𝗲𝗯𝘁 𝗧𝗿𝗮𝗰𝗸𝗶𝗻𝗴 𝗗𝗮𝘀𝗵𝗯𝗼𝗮𝗿𝗱 Use a simple, user-friendly interface where both parties can monitor outstanding debts. It ensures everyone's on the same page and provides an easy way to keep track. 𝟲. 𝗙𝗿𝗲𝗾𝘂𝗲𝗻𝘁 𝗨𝗽𝗱𝗮𝘁𝗲𝘀 In the most non-intrusive way possible, keep clients informed about their debt status with regular updates. These reminders keep the debt on their radar, but it's your job to ensure they're not overbearing. 𝟳. 𝗘𝗺𝗽𝗮𝘁𝗵𝘆 𝗧𝗿𝗮𝗶𝗻𝗶𝗻𝗴 𝗙𝗼𝗿 𝗖𝗼𝗹𝗹𝗲𝗰𝘁𝗶𝗼𝗻 𝗦𝘁𝗮𝗳𝗳 Nobody likes being pestered about their debt. Handling it too aggressively can leave a bad taste in the client's mouth. Train your staff to focus on empathy and understanding. This equips them to preserve client relationships even in tough financial situations. Debt collection doesn't have to be complex or aggressive. This simple strategy has been a game-changer for me. Use it and get that bag!

If you're struggling with cash flows, here's a simple tool that can help ⤵ An accounts receivable ("A/R") aging report is an invaluable tool for every business to help track and manage outstanding customer invoices and payments. ➡ What is an A/R aging report? It's a report generated within your accounting software that lists each outstanding customer invoice and puts them into buckets based on when they're due. Typically, the buckets are "Current", 0-30 days, 31-60 days, 61-90, etc. past due, so you can see what percentage of your total A/R is current versus past due. ➡ How do I use the A/R aging report? ✅ Accounting/finance staff should review the A/R aging reports frequently with leaders and customer relationship managers. This proactive process can help to identify potential problems before they become major problems. ✅ Use software to generate and deliver electronic invoices to your customers. This is much more efficient than manually preparing invoices, plus it allows you to set up electronic payment options and automated reminders to alert your customers of the upcoming due dates of their invoices. ➡ A success story In 2020, I led accounting and finance for a telehealth staffing company. Because of the impact of COVID on hospitals (who were our primary customers), I was very concerned about customer payments slowing down, so I began meeting with my team weekly to review the A/R aging report. We would start by reviewing any customers who were past due. If my team wasn't able to get a response from the customer after emailing and calling them, then I would step in to help, or get assistance from our account managers. Then we would review the customers who were current. I encouraged my team to send reminders about upcoming invoice due dates and to reach out proactively to customers with approaching due dates to ensure that there were no issues that would hold up payment of the invoices. The result? We actually improved our collections cycle during the height of the pandemic. Our average days to collect payments improved from around 35-40 days down to around 25 days! 🙌🏻 ________________________________________________________________________________ I help purpose-driven organizations gain financial clarity and insights. If you're having trouble with cash flows, or have questions, I'd love to talk with you about how we can help. Feel free to send me a DM or email me at sfuller@virtusaccounting.co. Virtus Accounting Solutions, LLC #smallbusinesses #entrepreneurship #SmallBusinessSuccess #financialclarity #FinancialWisdom #Entrepreneurshiptips #faithinbusiness #faithbasedbusiness #missiondriven #purposedriven #CFOServices #CashFlowFridays

In the last few months, 1 in 3 #finance leaders I’ve spoken to admitted something quietly: A blind collections strategy damaged their customer relationships. That stuck with me. Because if cash flow is survival, customers are the oxygen. Burning the bridge to collect a check isn’t a win. It’s a slow bleed. Sarah McCauley a revolutionary AR voice once said, "Collections isn’t about control. It’s about building relationships that protect your #cashflow.” Today, most collections teams are stuck in a loop. Every overdue #invoice is treated the same. Collectors operate on static aging buckets, not real risk. Follow-ups feel like robotic nudges, not actual conversations. And worst of all? They’re blind to the customer’s experience on the other side. Here’s the problem no one’s talking about: Late payment isn’t always delinquency. Sometimes, it’s friction. Sometimes, it’s just silence. And we punish it all the same. But in B2B, the gap between a delayed payer and a high-LTV customer is razor-thin. Push too hard, or without context, and you don’t just lose the payment. You lose trust. You lose the account. You lose future revenue. The alternative? Empathetic, and personalized collections that have context from customer behaviour signals, over templated scripts. Because relationship-first isn’t soft. It’s strategic. #CFO #AccountsReceivable #AI #Collections