As a staffing startup, you need to collect on invoices as quickly as possible. Smooth operations depend on the remaining solvent. If a client fails to pay an invoice on time, your business can be adversely impacted. In the staffing business, you pay for your major cost of sale, labor, on a weekly basis. Your customers are expected to pay within thirty (30) days. For this reason, you need a collections system to attempt to recover revenue from unpaid invoices. By taking measured steps, you can implement a streamlined collections process to increase cash flow, reduce late payments and maintain customer relationships.
Use these tips to set up a collections system for your staffing startup.
Create a Tracking System
Develop a system to track payments and issue alerts for overdue invoices. The sooner you become aware of late invoices, the sooner you can take action to receive payment on them. You may want to implement software designed to track payments.
Develop Protocol for Late Payments
Create a strict protocol for missed payments. Clarify in the contract what the payment guidelines are. Include the consequences of a late payment, such as an additional fee. Ask clients to sign the agreement before providing your services. If a payment is missed, follow up with a phone call.Find out why the payment is late and when you can expect it. Reinforce the importance of prompt payments.
Perform Credit Checks
Conduct thorough credit and background checks on each new client. You may access resources online or use the services of a professional credit check company. Don’t extend credit unless a client is in a position to repay.
Create Clear Invoices
Make sure your invoices are complete and easily understood. Itemize everything, then send the invoice in a timely manner. This reduces questions and confusion that may result in delayed payment. Clarify how checks should be made out, where they should be sent, the due date, and instructions for paying online or by another method. Be sure to send each invoice to the right client and staff member.
Offer Payment Options
Provide a variety of payment options. These may include online payments, ACH or checks.
Avoid Extended Payment Terms
Do not extend payment terms beyond 30 days. Consider offering a discount for faster payment.
Outsource Collections to Madison Resources
Outsource your collections process to Madison Resources. We work on collecting outstanding balances so you can grow your business. Partner with us today.