Finesse Your Client Relationships
Now that you can identify each customer by category, you can take some measures to ensure that your top customers stick around, and your poor customers do not become more of a hassle than they're worth:
- Customers that land in the poor category may best be handled by a third-party collections agency if the follow-up is taking too much time away from you or your staff. Follow up quickly on all promises and payments. Document every bit of communication with the customer so that you can find patterns (i.e. Are they routinely disputing small items? Do they claim they "never received" the original invoice?"). Adjust the tone of the follow up email to one that is harsher in nature, and, if all else fails, send them to a collection agency. If these customers remain a major headache, it might be worth discussing if their business is worth the hassle.
- For customers landing in the average category, your goal should be to turn more of these customers into top customers, and-at the very least-take measures to ensure that they don't become problem customers. Contact them early and consistently so that they see that you closely monitor their accounts, and thank them when payments are received.
- The goal with your top customers is to ensure that they remain in that category. Words of thanks in a hand-written note, or a nomination for a business award can go a long way. Frequent check-ins about the services you are providing can also help you spot possible grievances before they become a deterring issue.
The bottom line: Knowing where to turn your efforts is what separates a stellar accounts receivable strategy from an inefficient one. Showing appreciation and dedicating time to the top and average customers will result in a healthier cash flow. For the customers in the "poor" category, it's time to fish or cut bait. They may best be handled by a third-party collections agency, or dropped as a client completely.
An effective accounts receivable manager may help provide key metrics as you segment out your customer categories.
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