Real Deal Examples

Image by Austin Distel

Improve your cash flow today without selling your accounts receivables!

If you can see your organizational Accounts Receivable problems in any of the examples below, rest assured you can improve your cash situation and soon!

Clerical Error?

The customer owed me a regular, multi-thousand-dollar payment. They had always paid on time before, so I assumed a clerical error. I spoke with the Accounts Payable clerk who informed me that I needed to send her a W-4 form. In fact, she had emailed me months before about this form and I had responded by saying that I represent a company, not an individual and therefore she did not need this form from me. She simply repeated her need. I could be right or I could get paid. I took the less than 10 minutes required to find, complete and send her the form and I was paid.

One Invoice Trying to Do Too Much

Tracking down a large customer payment, I discovered that the customer had become concerned about our additional billing which was in response to requests beyond our normal contract work. Because our contract work and our additional billing was on the same invoice, ​the entire amount was held up. Working with our main, daily customer contact, I asked if we could split the bill. We needed to work on a new process with regards to our special requests so that the customer would once again feel confident in our invoice. She agreed. We created a new invoice and she had the regular amount paid quickly. We then sat down together and developed a process that the customer controlled on the front end. We reconciled monthly, before the invoice was created so all discrepancies were handled in advance. We regained our customer’s trust and were back on track with all our payments.

We take credit cards, what's the problem?

Taking credit card payments may make you feel that you’ll have no trouble getting paid, but not necessarily. I took over at a place that was taking credit card purchases over an antiquated terminal. Only one person knew how to get it to work reliably and she worked part time. When people wanted to purchase that way, and she wasn’t there, they were told to call back! Further, if the amount was over a certain small threshold, they were told they had to pay by check, sent in the mail (due to high credit card fees). We eventually went to an online CRM (Customer Relationship Management) system which included online payment processing of all major credit cards and EFTs without taking direct staff time at all. Payments became an automatic thing rather than a continual problem, challenge and point of dissatisfaction for the customer.

Multi-National Layer Challenge

One of my customers worked for a U.S. division of a multi-national company. The parent company had very strict rules about who they would cut checks to but much easier policies regarding individual credit card use. When she could not get our bill paid through the CFO, she paid us with her company credit card. Because we did not cap the amount we would accept through credit card payments, we got paid.

My Car Loan was Factored!

A couple of years ago I bought a new car and got the loan through my local credit union, where I was already a customer. Within a couple of months, my loan was sold (with many others, I’m sure) to a large bank headquartered in another part of the country. I wanted to keep my business local so I went to the credit union to complain. But it was done, there was no possibility of a reversal. The big bank promised no change to the terms of the loan, but in practice, they did change how my loan was handled and it cost me hundreds of dollars before I could pay it off and close the account. They did not allow true penalty-free prepayment. When I made extra payments, they continued to take the same amount of interest on each one. When I called to complain, I was able to have a few months of the interest reversed, but after that they refused. If you’re thinking that factoring your Accounts Receivable will not affect your customers, don’t believe it.

Image by Sharon McCutcheon