Some customers go to any length to avoid paying, while others trickle in with small payments on a large amount due. Other business clients may encounter their own financial problems and simply are unable to pay.
If your time is spent trying to collect from overdue accounts, you won’t be able to focus on other important aspects of running your business. Here are some useful tips on collecting business debts from business blogger Larry Alton.
Remain calm – The angrier you get with a customer, the less they may feel like cooperating. An upbeat mood when communicating with debtors is likely to inspire a more positive response.
Know your rights – Educate yourself on your rights and legal options. A firmer grasp of the proper legal steps to take and in what order will help you become more confident in your interactions with customers.
Document everything – Make a record of any communication with the debtor. If the matter ends up in court, extensive records on your communication with the customer will be helpful.
Avoid harassing – Persistence is OK, harassment is not. Don’t call a customer every morning. Don’t shout at a customer. Rather, communicate every seven to 10 days and provide options for beginning to pay on a debt.
Offer to settle for less – If you have wrestled with a client who owes $10,000 for several months, they are probably as anxiety-ridden as you are. Offering to settle for $6,000 may provide the relief they need. Getting a percentage of an amount due is better than getting nothing at all.
A smart approach to debt collection can help small business owners stay solvent while remaining focused on the overall business strategy. If you are a small business owner who has encountered your own payment problems, it is wise to get out in front of it and consult with knowledgeable debt negotiation and consolidation attorneys.