People have been asking about systems for A/R, Accounts Receivable. Every small business has different systems reflecting the situation they are working within. A/R is a touchy subject because we are talking about cash flow, and let’s face it, cash flow issues rank up there as one of the scariest issues facing the business owner. You need your clients/customers to pay you so that you can pay your bills.

Why don’t people pay on time or respect your terms? Maybe they honestly forgot or misplaced the invoice and are waiting for a statement. Maybe they are having cash flow difficulties themselves. Maybe they have issue with your product or service that they haven’t told you about. And maybe, just maybe, they did pay and it slipped through the cracks on your end.

Simplification comes in two forms in this situation: systems to ease the process, and a helpful attitude to burn away mental clutter.

Follow your system
There are a number of possibilities for the outstanding receivable; you don’t know what’s going on until you give them a call. Perhaps you check your file two times a month for overdue invoices, on the 10th and 25th. It’s automatically on the calendar those two days. The phone number and contact name are already on the invoice, right? That was information you made sure was on the invoice when you created it. You pick up the phone, dial, and…

Clearing the mental clutter
Calls about money make a lot of people uncomfortable. Check in with yourself to evaluate your state of mind and mood. Remember you are simply calling to complete the transaction. Your company performed its part of the deal, now it’s their turn.

Think about calls you have received from businesses asking for money from you. Are you more, or less, inclined to make payment if they are friendly and polite or if they are rude and demanding? A negative attitude carries a lot further than the end of the phone call. It pays to go out of your way to be friendly.

When you are friendly, there is a higher likelihood for conversation and connection. This gives you the opportunity to work with your client/customer. Can’t pay the full amount? How about 1/2 now and 1/2 in 2 weeks? What realistically, can they commit to? Just because you call doesn’t make the cash magically appear in their account…. but paying four $500 payments may be a lot easier for them than one $2000 payment.

Back to the system
Take notes of the call on the invoice, including: date, name of person you spoke with, “LM” or “left message” if no one there, and what the results of the call were. “Sending 1/2 tomorrow 8/29 and the other 1/2 on 9/12″. Be specific. When you come back to the file on 9/15, will you be able to understand your notes? Better yet, if someone else were to open up the file on 9/15, would they understand your notes?

9/10, your next “check for overdue invoices” day rolls around. Maybe you give them a friendly reminder that they agreed to pay the other 1/2 this week. You’ve already established a friendly rapport regarding the invoice, so this can be a friendly reminder service call.

Making these calls keeps you in the forefront of their mind, and helps keep the full transaction positive. That’s good business.

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Shawn Tuttle is founder of Project Simplify.