What are the best practices for reducing billing disputes and improving collections?

2 Automate your billing process

Using a software or a service that automates your billing process can save you time, money, and errors. You can create and send invoices faster, track their status, send reminders, accept online payments, and generate reports. You can also integrate your billing system with your accounting software, CRM, or project management tools to streamline your workflow and avoid duplication or inconsistency. Automation can also reduce the risk of human error, fraud, or dispute.

3 Follow up regularly and politely

Don't wait until the due date or after to follow up with your clients. Send them a confirmation email when you send the invoice, a reminder a few days before the due date, and a thank you note when you receive the payment. If the payment is overdue, contact them as soon as possible and try to understand the reason and resolve the issue. Be polite, professional, and firm in your communication. Don't hesitate to escalate the matter if necessary, but always maintain a respectful tone.

5 Monitor your billing performance

Another best practice is to monitor your billing performance and identify areas for improvement. You can use metrics such as days sales outstanding (DSO), collection effectiveness index (CEI), accounts receivable turnover ratio (ART), and bad debt ratio (BDR) to measure how well you are managing your receivables and collections. You can also compare your performance to industry benchmarks or best practices to see how you stack up. By tracking and analyzing your billing performance, you can spot trends, issues, and opportunities and take action accordingly.

6 Train your staff and clients

Finally, you can reduce billing disputes and improve collections by training your staff and clients on your billing policies and procedures. Make sure your staff are familiar with your terms, systems, and processes and can handle any questions or complaints from your clients. Provide them with scripts, templates, or guidelines for effective communication and negotiation. Likewise, educate your clients on how to use your billing system, how to access their invoices and statements, and how to contact you for any inquiries or issues. By training your staff and clients, you can ensure a smooth and transparent billing experience for both parties.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?