When difficult economic conditions prevail it is critical that the true and tried techniques for account receivable collections are followed to maintain control of bad debts.
Bad debt can strangle the life our of any business, even during the good times.
Hard times make successful debt collection even more important.
This is the time to get back to basics.
Every year during spring training major league baseball teams start their programs with a rigorous program of the basics..
..
covering bases in bunting situations, the pitcher backing up the catcher during plays at the plate, outfield relays, sliding techniques etc.
The teams that execute these basics seem to be the ones in the playoffs.
Similarly, football teams practice tackling and blocking to prepare their players for the season.
So too should businesses, get back to the basics in maximizing the effectiveness of their accounts receivable collections.
Let's review some of the key things you should be doing to assure that your organization is doing the best possible job of collecting your accounts receivable.

1. Granting Credit: In today's economic turmoil the desire to grow business is high, it is critical that credit worthy standards be maintained.
   Slow payers and bad debts can only harm your business plan.
   When a period of high business returns, it too requires that credit standards be kept.
   The euphoria of boom times can often lead to the discarding of good business practice.
   Too many bad debts and slow cash-flow and you can lose out on opportunities to grow your business.
   If you earn a bottom line of 10% a bad debt of $1,000 will require $10,000 in new sales to make up that lose.
   
2. In-House Receivable Collections: Develop a planned methodology for following up on your overdue receivables.
   Stick to that plan and use reporting techniques that get important information to all departments concerned with maintaining account relationships.
   
3. Utilizing Collection Services: Many high quality commercial collections agencies are available to help you recover your bad debts.
   Select one that understands your needs and can work in partnership with you to maximize collections.
   Most collection agencies work on a contingency basis; if they don't collection, there is no cost to the client.
   The fees they charge vary with the size and age of the debt.
   A first-rate collection agency will provide ethical and effective collection services and positively impact your cash flow.
   
4. However, do not delay using a collection agency.
   The longer a debt is unpaid, the more difficult it is to collect.
   A debt that is 90 days overdue has a 75% chance of recovery, one that is 6 months old, a 55%chance of recovery and one that is 9 months old a 43% chance of recovery.
   

Back to basics can sometimes seem like an overused phrase.
But sticking to that mindset can and following the points above can give you an edge in this troubling business environment.