No one likes to think about collections. Selling is sexy, building products is innovative, solving customer’s problems is fulfilling. Collections aren’t’ fun. It’s when you have to ask to get paid and maybe have a difficult conversation. Regardless of the uncomfortable nature of collections, it’s essential and you have to focus on them.
1. Build a process around collections. Make it routine. Monitor your Accounts Receivable (AR) and know who should reach out to the client and when. The internal person could differ by client, but everyone has to know their role. However, they won’t know what to do if you don’t have a centralized monitoring system for aged AR and a process to follow.
2. Compensate on collections, not sales. A sale is only as good as the money you collect for it. Make sure your performance plans and compensation/commissions plans are based on collections or you could end up with a lot of sales that waste your company’s time and resources.