How do businesses actually collect their accounts receivables? It’s a tricky and often unpleasant process. But, one that’s absolutely necessary because it’s not only money owed, it’s time and effort already spent. More particularly, you can’t just avoid or ignore unpaid invoices. After all, your company depends on the money, regardless if you take up the task yourself or hire someone. Unfortunately, it’s a bigger challenge during such uncertain economic times. Biggest Obstacles in Getting People to Pay Up The most common difficulties in collecting accounts receivables can be enough to convince you to give up. People stonewall. They sometimes partially pay. Other outright elude. There are even individuals who’ll send in checks they know won’t clear the bank. All of these behaviors are sadly normal. But, making it all the more difficult is the current economic uncertainty. Your business’s accounts receivable are an important part of calculating your profitability, and provide the clearest indicator of the business’s income. They are considered an asset, as they represent money coming into the company. —Business News Daily The pandemic response resulted in both short- and long-term shutdowns. That put undue strain on many businesses. So, it’s understandable some would fall behind financially. Although, after a little while, you expect something out of them, even if it’s only an explanation as to why they can’t pay and a sincere apology. (Regrettably, the latter might just well be all that you’ll get.) Ways to Collect Business Account Receivables First of all, it’s critical that you have good accounts receivable practices. Being proactive definitely benefits your business. But, when invoices continually go unpaid, there are actions you can take. Here are three effective strategies to collect your business’ accounts receivables: Act quickly when a payment is late. Do not make the mistake of letting receivables age. The longer an invoice goes unpaid, the less likely it is to ever be paid. Sure, it’s uncomfortable to pursue payment, but it’s necessary. Be kind but persistent and also be consistent as to your collection demeanor and actions. Reach out with friendly but stern reminders and follow-up regularly. Offer recipients a decent discount. Of course, you naturally want every penny that’s owed to your business. But, if offering a discount means collecting the majority of what’s due, then it’s more than worthwhile. But, do not make the mistake of discounting further because it will only weaken your position. (Plus, there’s a cut-off point where it’s financially unfeasible.) Provide an easy repayment plan. You can also provide recipients with a repayment schedule. Breaking up the total amount into a few or several installments might just do the trick. You can even charge a fee for late or missed payments. You can also suspend any new business during the repayment timeline. Consistent communication. Most important, communicate to your customer, that they must communicate promptly and consistently and follow through with their commitments. What other methods would you suggest to collect account receivables? Please take a moment to share your thoughts and experiences. Your unique perspective could very well help a fellow entrepreneur out! Interested in learning more about business? Then just visit Waters Business Consulting Group.

Disney has a strategy to increase its bottom line and squeeze more revenue out of its most iconic assets – price people out of its theme parks. This definitely seems counterintuitive, but it actually makes a lot of sense when explained. On its face, this sounds ridiculous, except it does seem to have a lot of potential and that’s why the executives are making some very bold moves. Why Disney is Purposely Pricing People Out of its Parks Disney has a serious problem with its parks – they are just too popular and that means they’re overcrowded. Anyone who’s been to its theme parks, particularly over the last several years, has most definitely noticed this. The predicament is most pervasive in Orlando, where ride wait times have gone up to as much as 420 minutes or 7 hours. You read that correctly. Just last week, its newest and most anticipated attraction, Rise of the Resistance, recorded a wait time of seven hours. This, despite the fact the experience opened in December 2019, nearly three years ago. Be mindful of competitors. If they are raising prices, it’s easier for you to do so too. Don’t forget to evaluate how your customers will react (fully accept the increase, stop, or lower purchases) as well as the possibility of maintaining price to generate higher volume (stealing customers from rivals). If the competition holds steady on prices, there is less opportunity for a hike. —Harvard Business Review And, it’s not just the latest and greatest rides and attractions either. Some of its oldest staples routinely experience wait times in excess of an hour, even two or more. What’s more, wait times for sit-down restaurants can easily be two or more hours for anyone without reservations. (By the way, those reservations must be made three to six months in advance.) Just these anecdotal figures should tell you something – the parks have way too many people visiting. In fact, exiting Main Street in the Magic Kingdom after the fireworks show can take up to two hours to get from the park exit to the parking lot on busy days (a twenty-minute trek when crowds are super light). Of course, anyone who looks at these figures would think that Disney would be very happy with its premium capacity. But, as executives have explained on various earning calls, their per capita spending in the parks is somewhat paltry – particularly among annual passholders. Annual passholders are a problem for Disney because they present a conundrum. While they pay a premium for their privileges, they spend relatively little money in the parks. Conversely, families and couples traveling from out of state or from international destinations spend quite a bit of money in the parks on top of the pricey admission. In other words, annual passholders come in through the gate, spend a few hours enjoying rides and attractions, and then leave. Meanwhile, couples and families making dedicated trips plunk down a lot of money on things like hotels, souvenirs, snacks and dining, and Genie Plus (a paid skip-the-line service), as well as special experiences. Should Your Small Business Raise its Prices Too? For the foreseeable future, Disney will continue to raise its prices on everything: admission, food, merchandise, and services and experiences. The company plans to earn more money from fewer visitors. This brings up an interesting question – should your small business follow the same strategy? If you haven’t raised prices in quite some time and/or offer discounted rates to be out pricier competition, it’s probably a good idea to consider. Plus, if your business needs substantially more customers than your competitors to turn the same profit, it’s definitely worth exploring. To answer these questions and more, speak with an experienced business consultant who can assess your situation and help you determine a new pricing strategy. You just may be losing out on revenue that could be going to your bottom line. Interested in learning more about business? Then just visit Waters Business Consulting Group.