How to Overcome Uncollectible Accounts Due to Stubborn Clients

Accounts receivable is an important part of business related to business profits. In practice, receivables are a form of debt from customers to you that need to be billed. Accounts receivable itself is divided into 4 types such as;

• Accounts Receivable Current 

receivables are billed based on the pre-made agreement between the buyer and the seller. 

Read more: The types and function of bill in business transaction

• Non-Current

Receivables This receivable is included in the category of receivables that cannot be paid on time so that the seller feels aggrieved by this. 

• Receivables Written

Off These receivables occur when the buyer or consumer is unable to fulfill their obligation to pay them off. 

• Accounts Receivable Appropriated

This receivable is included in the types of receivables that are set aside or separated by the seller from uncollectible receivables. 

Accounts receivable are usually subject to a term of payment of 30 to 60 days to be paid. During this time, the company needs to collect invoices so that consumers pay. If not, they do not get income which leads to a cash flow that is not smooth and causes bad debts. 

Read more: The best invoice example for payment collection

In doing business, bad debts can often also occur due to a lack of debt control by the company. In order for this problem, the company needs to conduct periodic evaluations in order to find out what problems cause uncollectible receivables. 

Because receivables are important for companies, the solution that can be done is to collect them appropriately. In the following, there are several ways you can do so that customers can pay off existing arrears. 

• Telephone 
• Request letter
• Leave it to a debt collection agency

Collecting intensively and continuously

The company needs to contact customers intensively so that they can pay off existing receivables. This is usually done by telephone, mail delivery or even using a debt collection service if it does not go well. This can help the company so that existing receivables can be paid off immediately. 

Determining the receivables policy firmly

One of the things that can be done is to make a firm policy. This is done at the beginning of the transaction where, the seller and the buyer negotiate with each other regarding policies that can be done. That way, it can form an agreement that helps both the seller and the buyer in the transaction. For example, a seller can apply for term of payment a faster depending on the type of transaction that exists. If the buyer agrees, then the payment can happen faster.

If the customer still doesn’t comply with this, the seller can use another solution, the Paper Finance Solution (PFS). PFS is an invoice-based business financing solution. Invoices can be disbursed faster so that your business and production cash flow will continue to run smoothly. Click here to find out how to apply and the type of funding that suits you.