Customers owing you money is now a common fact of business. That is why proper debt collection is an essential part of business operations nowadays. The trouble is that sometimes it can be hard to get that money from your customer. Here are a few tips on what you can do to ensure that you get the money that is owed to you.
Prepare For It
The problem that most companies have when collecting debt is that they are not prepared to do it when the time comes. They assume that the customer will come to them to pay their debts. However, debtors aren’t always that considerate and they may delay as long as possible. They may even wait for you to come calling.
That is why you need to be prepared for the collection process. Have all the paperwork ready. You’ll need invoices, receipts, and all the necessary contracts. You also need to take note of your collection efforts, so be ready to record them.
Don’t go in hard immediately. Try to start off simple and non-aggressive. Assume that the debtor is just slightly delayed with the payment for legitimate reasons. The beginning should be just gentle reminders of the payment. If they keep making excuses, that is when you will have to escalate to stricter treatment. The rule of thumb is to be more direct by the third warning.
Always Be Polite
One of the big mistakes people make is that they are too aggressive. The key to getting your debt paid is to be as polite as possible and try to accommodate your debtor a bit. Being angry or aggressive will force your debtor to go on the defensive side. Always be understanding, though.
However, don’t be a pushover. Most people have excuses for non-payment. When they do this, confirm their story. The key thing is to listen to what the debtor has to say and to respond appropriately. Most of the time, they will start paying up.
Be Willing to Call in Help
There are occasions when people are not going to pay up. This might be because they legitimately can’t pay or have less honest reasons. Give them enough time but eventually, you will need to do something about it. However, most of the time, you can’t do it personally. For example, the forfeiture of a commercial lease can be too complicated for a small business.
That is why you will need to call collection agencies. These agencies are experts at collecting debt in one way or another. They usually charge a fee, but having some of your money is better than not getting anything back.
Always Follow the Rules
Not many people are aware of it but there are actually rules for debt collection. If you are collecting debts, then you need to be aware of those rules. This ensures that you don’t have another problem on top of your current debt collection issues.
With the tips above, you can be sure that your collection process will be smoother. Don’t let debts pile up and drag down your revenue stream. Start collecting now so that your company’s financial health is assured.