Too much in receivables

[trimitbyrich]

Seems every month we have 8 - $9,000 in outstanding receivables. Our policy is 50% down to start project 50% balance upon completion. Seems a lot of clients show upto pick up their projects and forget to bring a check. Seriously? How do you prevent this!

 

[player]

Tell them no.

Also call to collect. Often.

 

[Chriswagner92]

no sign until check in hand?

 

[sdodson1]

We make it a point to tell them the balance due when calling them to tell them the work is ready. It seemed to stop that behavior. Also we will offer to take a credit card via phone to make it easy for the client to send anyone to pick it up.

 

[StarSign]

That's the nice thing about SignVox. We email the customer when their job is done and attach the invoice. Our receivables have gone done dramatically.

 

[GaSouthpaw]

no sign until check in hand?

^^^This. x1000

 

[James Burke]

How do you prevent this!

Your answer lies within your own question. Over the years, I've learned that most business problems result from the obvious, not the unknown.


JB

 

[Gino]

Other than a grocery store or movie theater, I don't know of a business model in which you can get your product and leave without paying, unless pros arrangements were made.

We have receivables all the time. It's the nature of the beast. However, we have terms and conditions which are followed pretty closely. If we allow something to leave our premises without being paid for, we better have that figured into the costs. Otherwise, like stated.... you are breaking your own rules for business operation.

 

[2B]

We make it a point to tell them the balance due before they arrive for the products. Also we will offer to take a credit card via phone to make it easy for the client to send anyone to pick it up.

We email the customer when their job is done and attach the invoice. Our receivables have gone done dramatically.

+1 to both

 

[CanuckSigns]

is that all?!

we have over $60,000 in receivables right now, it never really drops below $40,000, 75% of them are within their 30 day terms so i'm not worried

we deal a lot with the construction/mining industries, if you don't give them 30 or 60 days, you don't get the big jobs, it's as easy as that.

 

[TXFB.INS]

is that all?!

we have over $60,000 in receivables right now, it never really drops below $40,000, 75% of them are within their 30 day terms so i'm not worried

we deal a lot with the construction/mining industries, if you don't give them 30 or 60 days, you don't get the big jobs, it's as easy as that.

+! big jobs are 90% done off terms, ideally 30 days but can go to 90 days.

the biggest improvement we have seen is as soon as the job is completed send the invoice to the AP person. DO NOT WAIT for the products to be picked up.

 

[Speedsterbeast]

I find it took me a year or so of being in business to realize that it's ok to ask for your money. You shouldn't feel uncomfortable with it. It's YOUR money. Remember that. It's ok to call and say you noticed that their account is owing and can we take care of that right away.
However, it is the nature of the beast. I'm a 1 man operation, and often have my receivables exceed $20,000. Haven't been screwed over yet, but I have clients who pay quick and ones who pay slow. The ones who pay slow pay more.

 

[synergy_jim]

$74,000 here right now.... I'd kill for 9K.

The catch is we do a ton of business with people that require 30 day terms

 

[neil_se]

130k+ here, argg. We were north of 200k two years ago though until we brought in new payment policies. The difficult ones to collect are those where we've installed on site and it takes 30-90 days to get the balance rather than immediately after completion like it should be. For jobs being collected, reminding them that the balance is due on pick up works best, ask them to bring a transfer receipt with them if they're direct depositing funds.

 

[gabagoo]

We run about $40,000, but they are within terms. Sometimes taking the hit on Visa is worth it just to get paid immediately.

I often wonder why we even have terms for 75% of our clients as they are not reselling the items, so if you don't want to pay me now, why would you want to pay me later? Thank Goodness they pay!!!

 

[Mosh]

if you don't give them 30 or 60 days, you don't get the big jobs, it's as easy as that.

While this is true, I found that on those accounts if I put due in 10 days on the invoice they get paid way faster.
A person who makes checks out for a company I do work for told me to try that. The people who order the signs and the ones who pay
are always different people so they don't know anyway.

 

[hotrod46]

As a percentage of sales

I have clients that have $200,000 a month in receivables! Is that a lot?
Not if sales are $2 million a month. It would be a huge help with this if members would tell us
what the percentage of sales their receivables are. Right now ours are about
25%. Maybe high, I'm not sure.

 

[ddarlak]

I stopped putting terms on all invoices. they simply read DUE UPON RECEIPT, sure most of my larger clients pay when they want to. I only call the receivables in when I foresee a money crunch coming, then they say its in the next check run, you should see it tomorrow........

 

[artbot]

50% DOWN, NET 30days on the balance. that is all i've ever done. my clients wouldn't even call me if i was asking COD. after all
they are paying me with the check they get from their client. it gets odd when you've seemed busy (successful) lately and your kid asks "dad, when
are we EVER going to have money again?" and you have to keep reminding that "in three or four weeks, we will be loaded" until then
it's the credit card for everything.

 

[JMPrinting]

I've been in business for a year now, I don't do the volume you guys do. My first year I did $95,000 in total sales. I have $147.00 outstanding, why? All customers pay 100% in advance. If they are ordering a sign or vehicle lettering I expect they should have the cost to cover it before they order. Certain customers I am more flexible. I know when I do work for the city and county I live in it's on terms but any local business or whatever I have it paid in advance.

 

[Stanton]

Believe it or not, I can be point blank.

"Don't have money to pay for it ?, Can you call your bank or your Mom ?"
They can always find YOUR money.


If the contract calls extended terms, stick to them. DO NOT WAIVER.

Sometimes I would do 25% down and 25% each for three more months.

30 days late is a phone call.
60 days late is a letter from your lawyer. (you have a lawyer, right ?).
90 days late you turn it over to collections.

If you are going to lease a sign use your customers bank to carry the contract.


One time I had a restaurant past 60 days.
I went and enjoyed dinner with wine.

Tipped the server VERY WELL and asked to see <NAME>.

His jaw dropped.
I thanked him for the meal and told him I would be back tomorrow night.

There are creative ways to do stuff.