Collecting bad-debt is one of the biggest challenges that every service based business is facing right now. Bad debt is classified as company loss and as business owners, we have no choice but to keep collecting until everything is all accounted for. Too much delinquency will end up affecting your cash flow which will lead other major problems that will affect your employees and the business itself. Here are several tips in order to be successful in small business debt collection, kindly read through the entire article and hopefully, you would earn something from this.
1.) Call or get in touch with your delinquent clients and find out the reason why they haven’t paid yet. Any debt that goes beyond 30 days is considered as past due. If you are a service provider you would need to temporarily cut-off or bar any services till the amount gets settled. The re should be a set of rules established when collecting debts on a 30-60-90 day bucket.
2.) Send constant reminders by sending letters through snail mail and e-mail. Some clients would give out excuses that they have not heard anything from you. So your letters will serve as a constant reminder that you have reached out to them regarding the outstanding amount that needs to be settled.
3. ) Hire or get the services of debt collection agencies to help you collect most of the money that your customer’ owe you. If you are challenged in this area, a team of professional collectors can do the job for you. They can also offer special payment arrangements or promise to pay options and accept different payment methods just to get your money back.
4.) Always keep records of your customers account just in case that they would like to dispute something. One of the main reasons why there are non-paying clients are because of outstanding complaints and disputes. If you are having a lot of this issues better take a good look on their records and check the account history. Arrange an amicable settlement with the customer to make sure that they still get a fair treatment after what happened.
5.) Make paying or settling their account easier for them by offering different and affordable payment schemes. Sadly, there are some clients who are unable to settle debts due to financial constraints or sudden loss of income. We feel bad that they going through hard times so offering them to pay a reasonable amount on a monthly basis till they get back on their feet is a very good action plan to retain our clients.