Resolve Customer Billing Disputes Promptly
Every business has its share of slow-paying customers and plain old bad apples who won’t settle up without making a fuss. During the coronavirus (COVID-19) crisis, this is likely to be more true than ever.
Still, some companies always seem to be embroiled in lengthy and counterproductive billing disputes with their customers, in any economy. Be careful that your business doesn’t fall into that rut. Here are some general principles to consider.
If you find that more than 5% to 10% of your accounts receivable are late because they are in the “dispute” category, take corrective action to shift them into the “paid” category.
Review your accounts receivable for signs of collection problems, which generally fall into these basic categories of customers:
- Unable to pay, including companies that are insolvent, bankrupt, or dealing with the death of an owner. Don’t waste a lot of time on these cases. There’s generally nothing you can do except get in line at the courthouse and hope to recover something or wait until the company recovers from the turmoil created by the death.
- Financially strapped but able to pay. This includes companies that could go to a bank and borrow the money. When these people say they can’t pay, what they’re really saying is they decided to pay someone else instead. Effective staff members in your accounts receivable department should be able to convince these customers to pay your company first.
- Refusing to pay, although they could, because of a billing dispute. This includes companies that disagree with the bill. Somebody in your firm should be responsible for resolving these accounts within 48 hours. If it takes longer, the problem generally magnifies and your customer might become alienated in the process.
Once you have that overall picture, try taking these three steps to get better results from that last category of intransigent customers:
- Set strict deadlines for resolving billing disputes.
- Post credits and corrections immediately once a dispute is resolved.
- Notify customers that the disputes and errors have been corrected.
Resolving billing disputes promptly gives you a better chance of collecting past due accounts — and keeping customers as the economy eventually returns to normal.
Welcome Walz Group’s Summer 2023 Interns
Welcome Walz Group's summer 2023 interns Hannah and Matthew!