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as a businessman for 10 years, collection is one of the biggest issue. for one, clients tend to really hold on to their cash up to the time na talagang hindi na maiiwasang ibayad na talaga. its a basic human and business instinct.

however, some of these ideas work for me:

 

a) we really enforce the terms and conditions of the contract in terms of payment. kung may delay or overdue, we do a penalty on our next billing. you have to make it known to your customers that their delay of payment exerts pressure on your business. so far, i have done these to around 4 huge clients and they worked. in fact, naging ally ko na nga yung CIO ng isang huge manufacturing company wherein, pag nagkakaproblema kami sa invoice, everything is escalated to them. however, to do this, you have to provide the best post-sales service possible para may momentum ka.

B) in relation to item a., we also give rebates if they are paying before the due date.

c) we are also involving our account managers on the collections, since it is the concept that collections is still part of sales and accounts management. we deduct what we call "cost of money" on the commissions if we found out or determine that the actual collection overdue is due to the kapabayaan ng account manager (like documents that need to be done prior to collections). however, we do give out some small incentives to our account managers if they are able to collect in time.

 

so far, in two years, our collection efficiency has increased from 40% to 85%.

 

siguro, these things can also work for individual, non-corporate or retail clients.

Edited by Google
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my friend told me to be aware of hotel kimberly along malate, classic case of lousy payer with excuses such as the boss is out, no signature on the check, the accoutant is out, the drawer is locked. blah blah blah. be careful of a certain ms juvee (purchaser) and ms ann (check releasing), these gals work in tandem to give their suppliers hell.

Over 50% of the restaurants in Malate are difficult to deal with.

But if you monitor their sales, lots of customers are coming in and out of the premise.

 

In Quezon City, it is even worst.

Over 50% of the restaurants close in the 1st two years.

 

Maybe our average commercial rent is too high.

Edited by johnlove
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