Innovations in Accounts Receivable - By: Justin Davis

The most annoying thing about being an independent contractor is when your customers don't pay their bills on time so that you yourself can pay your own bills. But this is normal in business operations, it happens all the time. So it should be noted that this is nothing personal. Let us discuss some points to consider so that your clients are compelled to pay on time.

You can give them a little nudge like a motivation with a discount strategy. Once they pay arlier they get a discount of, say, 2 percent. This surely works very well on everyone. Utility companies use this strategy and we always pay our bills on time. This is sure to effect behavior change from your slow-paying customers. If you have a big fish client who always pays late for, say, six months, then you can raise their bill by adding the amount of six months worth of interest. Of course, if they pay earlier you can carry over the excess to their next bill.

If possible ask to be paid in advance. After all, rendering a service should entail motivation. Thus, some clients wouldn't object to paying cash in advance so that they are ensured that you will do a good job. But there are certain drawbacks to this, one of which is you are going to be carrying a lot of cash in your person. This would be a problem if your service was carried out overseas. You would have a hard time explaining to customs that you are not a drug dealer or a counterfeiter.

One more drawback is banks don't take lightly if you deposited a large sum of money (unless, of course, if you have a Swiss account). They would be asking a lot of questions about where it came from.

There's another accounts receivable circumstance that may sound too good to be true but nevertheless can create some repercussions later. At times, some mistake happens in the Accounts Payable Department and they pay for the same job twice.

You would always provide them the best possible service if you value your clients enough. If you value the integrity of your own business, honesty is always the best policy. When attempting to return the second check, you might be making them look bad by pointing out a mistake. If they would insist that they made no such mistake, you'd be placed in a tight spot. You have a choice to just take the check. But what if they find the mistake in their records? They would be thinking that you were dishonest. The best solution would be to deduct the check's amount from their next bill and call it a rebate.

Look at the headlines in your newspaper. Environmental concerns are major concerns today and every day: people are worried about the price of gas; scientists and governments are debating the issue of global warming and what to do about it; stories abound regarding solar energy and other alternative energy sources such as nuclear energy, biodiesel fuel production, and energy produced by wind farms. The price of a gallon of gas and how many miles to the gallon a particular car can achieve- both are familiar topics. The quality of our air is reported regularly and in some areas alerts are posted on particularly polluted air days. The purity of our water and whether or not we will have enough water for humans and agriculture are serious concerns. Is it any wonder that world wide concerns regarding our environment are subjects of intense debate today? What are governments and businesses doing about these issues? What is cleantech?
According to the Cleantech Group: "Cleantech is any knowledge based product or service that improves operational performance, productivity or efficiency; while reducing costs, inputs, energy consumption, waste or pollution." In other words, cleantech may be a product, a technology, or an application (way of doing things) that achieves environmental and social goals with economic benefits superior to the status quo.

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