Business loans may not always be the best route. Either you simply can’t get a business loan because you haven’t been established long enough or the bank won’t give you one. Or maybe you simply would prefer not to take out a business loan and have those payments hanging over your head. No matter what the reason is, there are usually other options than simply taking out a loan. One of those options is tapping into your accounts receivable. Often, there are thousands of dollars waiting to be collected on that simply, haven’t. Here’s how to tap into that cash flow.
- Work Together
The sales department does a really good job of getting to know customers. That is one way that they make the deal, the customers trust them and have become comfortable with them. Use their knowledge of the customer to your advantage. Find out if you’re calling the right contact or ask for a contact that may be able to pull strings and get the payment over faster.
- Make Follow Up Calls
A follow up call should be made after almost every contact you have with them via email. Did you send out the invoice? Give them a call to make sure they received it. Did they make a promise to pay you? Give them a call when that date was overlooked. By calling, you are holding them more responsible and they will feel more obligated to pay on time.
- Create Payment Plans
One of the more popular reasons someone isn’t paying on time: they don’t have the money to give you. Getting upset with them and throwing a fit isn’t going to make that money suddenly appear if it doesn’t exist. Work with the customer and create a payment plan so that you can at least have a cash flow. Have them pay you monthly or in installments.
- Institute Late Fees
For those that do have the cash, but are always dragging their feet, it may be time to institute a late fee. Make it clear up front that you will have to charge 2 percent whenever they go past their due date. Losing money to a late fee always tends to get those late payer’s feet moving.
Why take out a business loan when the cash is there? You just simply haven’t discovered the way to collect on it correctly and efficiently. By tapping into your unused resources you’ll save yourself from having to make payments on a loan with interest, saving you more in the long run.