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  Speedy Conflict Resolution
 Can Make Better Customers

Every business has its share of slow-paying customers and plain old bad apples who won't settle up without making a fuss.

But some companies always seem to be embroiled in lengthy and counterproductive billing disputes with their customers. Be careful that your business doesn't fall into that rut. If you find that more than five  to 10 percent of your accounts receivable are late because they are lying in the "dispute" category, take corrective action to shift them  into the "paid" category.

Review your accounts receivable for signs of collection problems, which generally fall into these basic categories of customers:

  Unable to pay, including companies that are insolvent, bankrupt, or dealing with the death of an owner. Don't waste a lot of time on these cases. There's generally nothing you can do except get in line at the courthouse and hope to recover something.

 Financially strapped but able to pay. This includes companies that could go to a bank and borrow the money. When these people say they can't pay, what they're really saying is they decided to pay someone else instead. A good accounts receivable staff should be able convince them to pay your company first.

 Refusing to pay, although they could, because of a billing dispute. This includes companies that disagree with the bill. Somebody in your firm should be responsible for resolving these accounts within 48 hours. If it takes longer, the problem generally magnifies and your customer might become alienated in the process.

Once you have that overall picture, try taking these three steps to get better results from that last category of intransigent customers:

   1. Set strict deadlines for resolving billing disputes.

   2. Post credits and corrections immediately once a dispute is resolved.

   3. Notify customers that the disputes and errors have been corrected.

Resolving billing disputes promptly gives you a better chance of collecting past due accounts  and keeping customers.

 

Virtualex.com Ronald J. Cappuccio, J.D., LL.M.(Tax) 1800 Chapel Avenue West Suite 128 Cherry Hill, NJ 08002 Phone:(856) 665-2121 Fax: (856) 665-9005 Email: ron@taxesq.com

 
 
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