Thursday, April 22, 2010
Balancing Accounts Receivables & Client Relationships
Get a Hold of Your Accounts Receivables. Be Proactive & Make a Plan--The life of your company depends on it.
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The Balancing Act
All companies who bill their customers play the same balancing game. The game of balancing the intention to get paid with maintaining the customer relationship takes forethought to avoid the eventual collapse in either direction. If a company bills their customer, waiting to get paid can prove itself to be more work than the job that the company originally did for that customer.
If a company has accounts receivables, than essentially they have given a line of credit to that customer on good faith. Keeping a company’s accounts receivables to a minimum is difficult but vital to the growth of the company. If a customer chooses to take advantage of the good faith extended to them, the effects of this poor choice will fall on the company who extended the credit.
Ideally, a company would collect upfront, prior to servicing; however, this is not always feasible. The next best option is to collect half down and receive half cash on delivery (COD). A Letter of Credit is often another method used which attains a guarantee from the customer’s bank that verifies the available funds.
Nonetheless, most often companies choose to bill their customers after service or product has been issued. In this case, creating a plan to handle past due accounts is important to the reputation and life of the company.
So, why do customers pay late?
There are countless excuses from not having the money at the moment to losing the invoice. The excuse is irrelevant. The customer entered into a promise that they need to keep. Unfortunately, paying your bill is not your customer’s priority. Their focus is on their business, not yours, and often there are levels of priority in the accounting department as to which bills are paid first. Unfortunately, the small ‘Mom & Pop’ shops are often paid last. With that said, there are effective methods for managing those past due accounts, although at first it may seem unpleasant, once you embrace the value of integrity in all business aspects, then you will understand that the with the same integrity your company provided service and/or product you should expect equal integrity in return from that customer—“Do what you mean, mean what you say”. In order to stand by this, you must be firm and follow through. Consistency matters.
“Fool me once, shame on you…fool me twice, shame on me”
Aging reports need to be checked every day; whether you have someone else doing the actual collecting or not, you still need to know the status of your accounts. Be aware of what is happening. Most people neglect and put off things that are displeasing to them, and being the ‘collector’ is a hat most people do not wish to wear. However, the problem does not go away if you ignore it—actually, it only gets worse. Unlike wine, your accounts receivables do not improve with age. Unless, you take steps to remedy the problem, it will deteriorate to a point that it may no longer be collectible. Remember, you may not be the only one not getting paid by that customer. If a customer is having difficulty paying you, then the health of their business should be a concern and bankruptcy maybe in their near future.
Be Proactive
Take proactive steps to manage your account receivables. Begin by setting up a procedure for the quick collection on past due accounts. Then, set a plan in place for past due accounts 30, 60, 90 days and so on. The day your customer’s bill is due, they need to be contacted. Get a hold of them, and document all correspondence with this customer.
Create a complete file on this customer, not only for this account, but should your company choose to do business with this customer again, there is a history of this customer’s integrity, or lack thereof, concerning their accounts. Collect contact names, numbers, email addresses, and any necessary information. This will also greatly assist you or a collections agency, should the customer not settle their account peaceably and swiftly.
Learn the Art of Good Cop, Bad Cop
Cultivating good receivable collecting practices will improve your cash flow. Educate your staff on the importance of managing and collecting account receivables, and the procedures concerning the past due accounts. A good way to improve cash flow is to make the entire company aware of the importance of accounts receivable and collections. Should an account become deficient past 60 days, it’s time to step in with “Good Cop, Bad Cop”. Your company has played the part of ‘good cop’ without much avail, now it is time to place that account with the ‘bad cop’; one who will get in there aggressively and work to settle that account and get you your money. Stillwell and Stone, LLC is one of those firms that often sees results within the first 72hours! This is the type of company you should place your accounts with; one that doesn’t get paid until you do. This is a cost effective way to retrieve your money. There is no need to waste your time and money with a traditional lawyer who will continue to be the ‘good cop’ and write those “love letters” requesting for payment. As you know, that doesn’t work. The ‘bad cop’ needs to be fast and aggressive.
The art of ‘good cop, bad cop’ is very effective and will help eliminate the potential snowball effect that could happen to your accounts receivables should they be ignored and left to time.
Tuesday, April 20, 2010
How to Best Maintain Client Relationships
The Significance of Client Relationships
The success of any venture depends on the merit of the relationships developed between all those concerned wherein. A good working relationship, like a good friendship, builds a solid connection and understanding between parties. To attain such a bond takes more than regular communication, although an important aspect, but more-so involves devoting time and effort into understanding the client, their industry and the circumstances involved.
Benefits of Good Client Relationships
Growing and preserving valuable and worthwhile relationships with clients yields many rewards. A high quality, functioning relationship allows a company to demonstrate their integrity, professionalism and proficiency. A client’s experience is one of the most significant ways by which your company will be evaluated.
Apart from advertising and promotional material, focus on the old proverb: ‘actions speak louder than words’. The client’s experience will form the opinions and voice they make in the open business world. This voice will greatly affect the company’s reputation in the marketplace and beyond.
Structuring and sustaining a successful client association is a gainful practice which boosts productivity and competence. Grumbling, disputes and misunderstandings expend vast amounts of time and money – a good client relationship ensures to the client that there will be a rapid and peaceful resolution of any troubles or conflicts. Time is money, and no one likes losing time.
Overseeing Multifaceted Client Relationships
Where a company employs a number of salesman or personnel who work with an individual client over a period of time, it is vital to make clear which person has the main duty for sustaining that client’s relationship. The input of other employees, over and above their procedural roles, should be plain, simple and to the point, careful not to contradict already understood material.
A unique approach to customer care is often needed to handle relationships with larger client organizations. It is key for the salesman or personnel to recognize the intricacy of the organization’s structure, the arrangement of client contacts within the organization, and the organization’s decision making procedures. It is essential to maintain regular contact with the client to ensure a continual and mutually beneficial good working relationship.
Laying the Groundwork
The first step in laying the groundwork between the company and the client is taking the time to know the client, as well as their business practices. Although policies may vary, the preliminary stages may include phone calls, meetings with the client and other significant people within the company, and relevant background research.
It is critical to be clear about how their company will benefit from a relationship with your company, as well as the proposed way of achieving this. An essential role of the salesman or personnel is to identify the needs of the client, and seek a solution to meet those needs. Successful communication of vision, goals and risks is a fundamental part of relationship building.
Operating with Values
The bottom line is to act with professionalism, proficiency and integrity at all times.
Importance of Documentation
Spelling out the procedures and expectations between the two companies on paper will greatly minimize misunderstandings. A Letter of Approval is often the first piece of documentation to be shown to the client, giving the salesman or personnel permission to proceed. This is a binding agreement between parties, initiated upon signing.
Ideally, the parties should then proceed with an official contract to verify the aspects of the job to be done, as well as charges and fees to be collected. Contract papers have an important function in setting up and preserving a good client relationship. The degree of detail necessary depends on the probability of deviation, but crucial areas that must be covered are the scope, fees and liability to be carried by the salesman or company. Two other areas that are often covered in contract documents are the degree of requirement of parties, and the way in which changes to the original agreement will be handled. This includes changes to the scope, rate and/or time frame.
The Value of Ongoing Communication
All relationships need nurturing. One of the most common reasons for the corrosion of a relationship is the perception of being taken for granted. The worst perception a client can have is to feel insignificant or forgotten. The salesman or personnel is accountable for the health of any client relationship, and for the amount of initial groundwork laid in the beginning must be continual throughout the life of the relationship.
Communication is Key to Cultivating Relationships
Broad, simple and regular communication is the most effective means of cultivating a client relationship. Regular updates through progress reports, phone calls, or email are very beneficial - recording and monitoring the ongoing communication is useful for checks and balances on the health of that relationship.
Social contact on a regular basis promotes the health of that relationship as the client feels ‘taken care of’ and reduces so-called “breakdowns” in communication. Also, should bad news need to be relayed to a client, the effect of that news is greatly lessened when there has not been a communication gap. “No news is good news” does not apply to strong relationships. Failure to communicate only increases the distance and weakens the bond between the parties. It will be difficult to weather the storm of disappointment with a client with whom the salesman shares a weak bond. Where a well-built relationship exists, the client is less likely to point fingers and lay blame, and more likely to work optimistically with the salesman or personnel to attain the necessary solution.
When to Let a Client Go
Ideally, there is a mutual relationship of trust and support between parties. Nonetheless, complex situations can arise, despite the efforts on the part of the salesman. Sometimes clients have unrealistic, unfeasible or inappropriate expectations for the salesman. In such circumstances, the first step is to try and revive the relationship referring back to the original contract or other documentation to support the integrity and efforts made on behalf of the client. If this effort proves to be in vain, a third party may be necessary to come in as another ‘voice of reason’ and mediate the situation - this may be another salesman or other neutral person within your firm. This liaison may soften the tension between the original salesman and the client, and often the relationship between them can be restored.
However, if all efforts have been exhausted, the salesman may have no other alternative but to make written note of the facts of the situation, demonstrating that the client has substantially breached the terms of the contract, and continue on with company procedures concerning a breach of contract. At this point, a “cooling off” time maybe necessary, but like a psycho ex-boyfriend, you never let a client go! Once a client always a client, and time heals all wounds. Revisit that client after time has done its work.
Ending Well
Ending well means proper completion of all documentation and evaluating the client’s satisfaction. Feedback from clients is a great way to assess the health of the relationship. A happy client will be a promoter for the salesman and the firm, potentially recommending other clients and otherwise becoming a beacon of free advertising.
Keeping a Client
Bottom line: A company needs repeat service from their clients. Keeping in contact with clients in between accounts will increase the chance of more accounts being given, and is the least expensive form of marketing out there. Classify the clients with the most potential for continual work and execute a schedule to keep in regular contact with them.
Use computer client management software and/or calendars to remind you to call or email a client, and track the communication. Other tactics include: sending e-newsletters, spotlighting the client’s successes through an online format (i.e. press release, website, etc), or offering opportunities for social contact (i.e. meeting at mutual associations, business conferences, network meetings, etc).
For more information contact:
April Cantrell, Director of Marketing
Stillwell and Stone, LLC
2600 Avenue K, 2nd Floor
Plano, Texas 75074
Office 972-886-8713
Fax 972-578-2851
www.stillwellandstone.com
The success of any venture depends on the merit of the relationships developed between all those concerned wherein. A good working relationship, like a good friendship, builds a solid connection and understanding between parties. To attain such a bond takes more than regular communication, although an important aspect, but more-so involves devoting time and effort into understanding the client, their industry and the circumstances involved.
Benefits of Good Client Relationships
Growing and preserving valuable and worthwhile relationships with clients yields many rewards. A high quality, functioning relationship allows a company to demonstrate their integrity, professionalism and proficiency. A client’s experience is one of the most significant ways by which your company will be evaluated.
Apart from advertising and promotional material, focus on the old proverb: ‘actions speak louder than words’. The client’s experience will form the opinions and voice they make in the open business world. This voice will greatly affect the company’s reputation in the marketplace and beyond.
Structuring and sustaining a successful client association is a gainful practice which boosts productivity and competence. Grumbling, disputes and misunderstandings expend vast amounts of time and money – a good client relationship ensures to the client that there will be a rapid and peaceful resolution of any troubles or conflicts. Time is money, and no one likes losing time.
Overseeing Multifaceted Client Relationships
Where a company employs a number of salesman or personnel who work with an individual client over a period of time, it is vital to make clear which person has the main duty for sustaining that client’s relationship. The input of other employees, over and above their procedural roles, should be plain, simple and to the point, careful not to contradict already understood material.
A unique approach to customer care is often needed to handle relationships with larger client organizations. It is key for the salesman or personnel to recognize the intricacy of the organization’s structure, the arrangement of client contacts within the organization, and the organization’s decision making procedures. It is essential to maintain regular contact with the client to ensure a continual and mutually beneficial good working relationship.
Laying the Groundwork
The first step in laying the groundwork between the company and the client is taking the time to know the client, as well as their business practices. Although policies may vary, the preliminary stages may include phone calls, meetings with the client and other significant people within the company, and relevant background research.
It is critical to be clear about how their company will benefit from a relationship with your company, as well as the proposed way of achieving this. An essential role of the salesman or personnel is to identify the needs of the client, and seek a solution to meet those needs. Successful communication of vision, goals and risks is a fundamental part of relationship building.
Operating with Values
The bottom line is to act with professionalism, proficiency and integrity at all times.
Importance of Documentation
Spelling out the procedures and expectations between the two companies on paper will greatly minimize misunderstandings. A Letter of Approval is often the first piece of documentation to be shown to the client, giving the salesman or personnel permission to proceed. This is a binding agreement between parties, initiated upon signing.
Ideally, the parties should then proceed with an official contract to verify the aspects of the job to be done, as well as charges and fees to be collected. Contract papers have an important function in setting up and preserving a good client relationship. The degree of detail necessary depends on the probability of deviation, but crucial areas that must be covered are the scope, fees and liability to be carried by the salesman or company. Two other areas that are often covered in contract documents are the degree of requirement of parties, and the way in which changes to the original agreement will be handled. This includes changes to the scope, rate and/or time frame.
The Value of Ongoing Communication
All relationships need nurturing. One of the most common reasons for the corrosion of a relationship is the perception of being taken for granted. The worst perception a client can have is to feel insignificant or forgotten. The salesman or personnel is accountable for the health of any client relationship, and for the amount of initial groundwork laid in the beginning must be continual throughout the life of the relationship.
Communication is Key to Cultivating Relationships
Broad, simple and regular communication is the most effective means of cultivating a client relationship. Regular updates through progress reports, phone calls, or email are very beneficial - recording and monitoring the ongoing communication is useful for checks and balances on the health of that relationship.
Social contact on a regular basis promotes the health of that relationship as the client feels ‘taken care of’ and reduces so-called “breakdowns” in communication. Also, should bad news need to be relayed to a client, the effect of that news is greatly lessened when there has not been a communication gap. “No news is good news” does not apply to strong relationships. Failure to communicate only increases the distance and weakens the bond between the parties. It will be difficult to weather the storm of disappointment with a client with whom the salesman shares a weak bond. Where a well-built relationship exists, the client is less likely to point fingers and lay blame, and more likely to work optimistically with the salesman or personnel to attain the necessary solution.
When to Let a Client Go
Ideally, there is a mutual relationship of trust and support between parties. Nonetheless, complex situations can arise, despite the efforts on the part of the salesman. Sometimes clients have unrealistic, unfeasible or inappropriate expectations for the salesman. In such circumstances, the first step is to try and revive the relationship referring back to the original contract or other documentation to support the integrity and efforts made on behalf of the client. If this effort proves to be in vain, a third party may be necessary to come in as another ‘voice of reason’ and mediate the situation - this may be another salesman or other neutral person within your firm. This liaison may soften the tension between the original salesman and the client, and often the relationship between them can be restored.
However, if all efforts have been exhausted, the salesman may have no other alternative but to make written note of the facts of the situation, demonstrating that the client has substantially breached the terms of the contract, and continue on with company procedures concerning a breach of contract. At this point, a “cooling off” time maybe necessary, but like a psycho ex-boyfriend, you never let a client go! Once a client always a client, and time heals all wounds. Revisit that client after time has done its work.
Ending Well
Ending well means proper completion of all documentation and evaluating the client’s satisfaction. Feedback from clients is a great way to assess the health of the relationship. A happy client will be a promoter for the salesman and the firm, potentially recommending other clients and otherwise becoming a beacon of free advertising.
Keeping a Client
Bottom line: A company needs repeat service from their clients. Keeping in contact with clients in between accounts will increase the chance of more accounts being given, and is the least expensive form of marketing out there. Classify the clients with the most potential for continual work and execute a schedule to keep in regular contact with them.
Use computer client management software and/or calendars to remind you to call or email a client, and track the communication. Other tactics include: sending e-newsletters, spotlighting the client’s successes through an online format (i.e. press release, website, etc), or offering opportunities for social contact (i.e. meeting at mutual associations, business conferences, network meetings, etc).
For more information contact:
April Cantrell, Director of Marketing
Stillwell and Stone, LLC
2600 Avenue K, 2nd Floor
Plano, Texas 75074
Office 972-886-8713
Fax 972-578-2851
www.stillwellandstone.com
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