Resolving Accounts Receivable disputes can be a costly process
Think of how much money it can potentially cost to resolve an accounts receivable dispute.
The labor alone is pricy. How many hours will you, your accounts receivable department or your collectors spend combing through the paper trail? How much time will you spend on the phone with each person involved?
And that’s just the tip of the iceberg!
The bottom line is you need your money in your bank working for you … not in someone else’s bank account waiting for an accounts receivable dispute to be settled.
The best way to keep the costs of an A/R dispute down is to take measures to prevent them in the first place.
That may seem too simplistic, but the reality is, you can save a significant amount of money by investing the time these preventative measures:
Review Your Policies: Start by reviewing your company policies and credit terms with your customer before they purchase. You do this with your new customers anyway but if you have a particularly large order, it’s a good idea to go back over your policies again.
Require a PO: Depending on your business, you might benefit from requiring purchase orders. A PO gives you the opportunity to address any discrepancies before they become problems. With everything in writing, there are fewer opportunities for misunderstandings.
Prompt Follow-Up: A prompt follow-up phone call or email can make all the difference. Touch base with your customer once your product or service has been delivered. Make sure they’re satisfied and if there’s an issue, resolve it immediately. This is good customer service that can solve problems before they come into existence!
Talk: Frequent conversations build trusting relationships and open communication. When your product has shipped, or services have been rendered, give your customer a follow-up phone call. Frequent conversations, whether there’s an issue at hand or just a friendly call, keeps you top of mind and gets invoices paid.
If you end up in an accounts receivable dispute even though you’ve taken these pre-emptive measures, your prompt action toward resolution is the only way to go. Get the undisputed portion paid immediately. With that much off your plate, you’ve already saved some money. Then dig into the details of the dispute before they get any older. The older a dispute gets, the harder it is to sort it out and collect.
Save money by avoiding a, A/R dispute. Save money by immediate action!