There are many aspects to run a business, but the simplest bottom line is that – you products and services in exchange for payments collected from your clients. Clients can be individual customers or they may often other businesses with which your company may contract. However, even if your clients are other businesses, you may have to use B2B collection strategies to try and get paid on your past due invoices.

Although there are many steps in the process of collecting commercial debt, it is crucial that you know them before taking legal action. B2B collections are often focused on signed agreements as well as the company’s internal payment policies that owe you money. Considering all the complexities involved in B2B collections, your business needs highly efficient strategies that maximize your chances of recovering on past due accounts as much as possible. Here are four important steps you should take to build your own effective strategy for B2B collections.

Implement Payment Tracking System

The only way you can learn if payments are late is through the use of a payment tracking system. Choose a payment tracking system which will provide all the features you need. Commonly used features include generating invoices, monitoring due dates, displaying past due amounts and creating reminders for email.

Do Follow-Up

While you are tracking payments, it is also essential to follow up with clients (or) businesses whose payment was not yet received as it can help you get paid before commencing with the official B2B collection process.

Define and Regulate Strict Penalties for Late Payments

Sometime there may be businesses that do not mind overlooking their payment deadlines even though they are having invoices to pay for. It’s also important to make sure that you actually apply the late fees and interest as negotiated in the contract if clients don’t pay on time. While you may also want to grant a grace period or forgive an occasional late fee or interest owed to your best customers who pay late, it is still vital that you are prepared to hold firm and implement the strict penalties as set out in the contract.

Ensure your strategy is around the terms of payment

If you’re taking on a client, you should make sure that you understand their terms of payment. Do they pay in 7 days? Thirty days? Sixty days? Do invoices have to be approved before they get paid? Knowing how the customer’s business handles invoices and payments can help you build an effective strategy on collections. Furthermore, if you have unique payment terms, you can make sure that you talk to the customer before they sign the agreement. Being on the same page about payment will help minimize past due accounts probability.

If you’re really looking for an appropriate in-house B2B collection strategy or need assistance with your collections, Consult Kenstone Capital and get more insights about B2B collections today itself!

Leave a Reply

Your email address will not be published.

Our firm provides the expert support organisations need to thrive in a fast-changing world.

Address: Sabari Complex, Field Marshal Cariappa Rd, Shanthala Nagar, Ashok Nagar, Bengaluru, Karnataka 560025.
Phone: 080 6824 8827
Mail: info@kenstonecapital.in