Turn Your Outstanding Invoices Into Cash: The Power of Early Intervention

We see it all too often. Businesses have a pile of outstanding invoices. They are not getting paid, and the business waits far too long to get serious about getting those customers to keep up with their payments.

Maybe they don’t have the systems in place to get late customers to pay or they may not want to upset their customers by implementing collection activity. But waiting too long to bring your customers to the table is a recipe for negative cash flow. Which can have long-lasting consequences.

Implementing early intervention is a far better strategy that is helping small businesses get paid.

Implementing systematic follow-ups and debt collection activity early in a delinquency is vital to the health of any size business.

Here’s why early intervention and timely debt collection activity are crucial to the health of your business.

Preserving positive cash flow

Cash flow is the lifeblood of any business. But if you’re running a small business, even a handful of late payments can disrupt positive cash flow. The fact that outstanding invoices can turn into negative cash flow quickly should be reason enough to be more proactive in collecting your money. When you’re challenged to meet payroll, pay vendors and meet your obligations for other operating costs, then that’s a position you don’t want to be in.

Early intervention on outstanding invoices preserves your cash flow and reduces the financial strain on your business.

Increases the likelihood of future on-time payments

There are a few undisputable facts about getting paid and collections. The longer an invoice is outstanding, the less chance it has of being paid. Some customers may forget, encounter unplanned financial difficulties, or prioritize other bills. Some may justify nonpayment because of a lack of communication. For others, they may have moved or relocated, which then forces you to track that customer down.

Early engagement on outstanding invoices increases your chances of getting the current invoice paid and can set the tone for future invoices. Because that customer now knows that you expect to be paid on time. Early intervention equals urgency.

Helps to prevent further escalation

Early intervention can help prevent delinquencies from going on for too long and mitigate some disputes. For example, if your invoice indicates late fees, your customer may want to dispute that, which would only delay payment. Resolving the unpaid invoice promptly can help prevent that from happening. Also, if a customer has a legitimate issue with the service you provided and has decided to dispute the entire invoice, early engagement can help resolve that matter before it goes on endlessly.

Helps to open the lines of communication

Consumers do not like it when a business provides service and then doesn’t invoice the customer for several months. Businesses that operate like this are only setting themselves up for negative cash flow, even later payments, and disputes. Invoicing on time, following up at regular intervals, and then engaging a collection agency early in the delinquency helps to minimize those late payments.

Early intervention also opens a line of communication where a professional debt collector can work with the consumer to resolve the delinquency. If your business does not communicate with the consumer, you will not get paid. Pretty simple…

Early intervention improves your internal budgeting and predictions

High delinquency rates and overdue invoices add uncertainty to your organization. You can’t budget properly, and you cannot forecast for the future. And high amounts of accounts receivables make planning and growth plans nearly impossible. When you have proper accounts receivables processes in place which includes using a reputable debt collection agency, it makes the budgeting process easier and gives a true snapshot of the health of your organization.

Early intervention is a proactive measure and a strategic necessity for any size business that wants to maintain healthy cash flow. Your business will not only get paid faster, but you’ll also maintain customer relationships and reduce the strain on various levels within the organization.