5 Legal Ways to Turn A/R into Cash in 60 Days

Introduction

If your business is facing overdue accounts receivable (A/R), taking the right legal steps is crucial. This guide offers 5 proven methods for turning A/R into cash within 60 days. Follow these steps to ensure timely collections and protect your business’s cash flow.

1. Assess Your A/R and Prioritize Collections

Start by reviewing all of your accounts and identifying high-priority clients with overdue payments. Segment your clients into categories based on the size of their debt and the likelihood of recovery, so you can focus on those who offer the best chances of resolution first.

2. Communicate Promptly and Effectively

Send reminder notices promptly after the due date has passed. If your initial follow-up doesn’t yield results, escalate the situation by sending formal demand letters. The sooner you address the issue, the more likely you are to get paid. Ensure you maintain a professional and firm tone, letting the client know you are prepared to take further action if necessary.

3. Negotiate Payment Plans

If a client is struggling to pay in full, consider offering installment payments. Negotiating a payment plan can help you recover the money over time while maintaining the business relationship. Always get the agreement in writing, outlining clear terms and deadlines.

4. Use Mediation or Arbitration

If direct negotiations fail, propose mediation or arbitration to resolve the dispute without resorting to lengthy and expensive litigation. These alternative dispute resolution methods can help you reach a fair settlement without going to court. Be sure to discuss the process and any associated costs with the client beforehand.

5. Engage Collection Agencies or Legal Action

If all else fails, consider engaging a professional collection agency or taking legal action. When opting for legal recourse, ensure the value of the debt justifies the cost of litigation. A lawyer specializing in collections can help you navigate this process efficiently.

Conclusion

By following these five steps, you can improve your chances of recovering overdue accounts and avoid the negative impact of uncollected A/R. For more assistance, feel free to contact us at JDE Law Firm, PLLC.