Collecting debt is a big subject for a lot of businesses, and today we’re going to look at that subject with our Goofus and Gallant analogues, CEO and CFO.
CEO doesn’t keep track of his monthly invoices, even the ones that he has to personally approve. He rarely follows up on them unless the business accounts are empty.
CFO makes sure that he follows up on any invoice a month after it’s been sent, often with an email first and then with a call. He makes sure that he takes notes, and makes sure to send out any additional paperwork his clients might need promptly.
CEO will always do business with people he likes. Period. He always forgets to check with Accounts Receivable first.
CFO lets other companies know that they won’t take more contracts if invoices are overdue.
CEO wants the whole amount paid right now. Partial payments are too complicated for him to deal with.
CFO is more than willing to negotiate with his customers to take partial payments on the oldest invoices first with staggered payments. He may even be willing to convert a receivable into a formal note with an amortization schedule and interest rate.
CEO doesn’t do terms. He does invoices. Any invoice is just like any other invoice, right?
CFO sets up incentives for quick and on time payments or conversely makes clear what interest is due on late payments. Both ways encourage clients to pay on time.
Remember to follow CFO’s excellent example to improve your overdue receivables. Don’t follow CEO’s example. Accounts receivable management really helps businesses keep their cash flow strong. If you need advice for establishing better procedures for receivables management, give us a call.
Tags: ceo and cfo, weirdly funny