Collection of debt is common in just about each business that operates since this one of the components of the business and corporate landscape. Today, the economy is tough and this could mean that customers may be having a difficult time than usual in paying their debts. When invoices begin to pile up and are not getting paid, it may be a good time and wise decision to to hire the service of a professional collection agency to provide help in the collection of debt or in getting these debts paid.
Collection of Debt – What To Do
Collection agencies are professionals in business to business (B2B) debt collection. Similar to any industry, there’re right and wrong approaches to carry out debt collections. While hiring an expert collection agency is one good approach to get those debts paid, there are other things you can first try. Below are a few:
Prepare Yourself Mentally
Expect customers who are late in their payments to have all sorts of excuses. It is crucial that you prepare yourself mentally and that you need to be friendly yet remain professional and firm. If you don’t prepare yourself, customers may take advantage of this and walk all over you. If negotiating isn’t your strong suit, delegate the task to a person in your company who can handle this.
Follow-up Unpaid Invoices
A lot of entrepreneurs tolerate customers who are late or delayed in settling their debts, probably because they want to avoid any confrontation, don’t want to offend anyone or perhaps are just very busy and preoccupied to track all receivables. First thing you have to do is to make time to review at least one day in a week all your receivables using your accounting software. Afterwards, establish and stick to a system that will help you make a follow-up on debts that are 3 days late, 1 week late, 15 days late, 30 days late and 45 days late.
Send a Reminder Letter
Letters, whether by post or email, are a mannerly way to give customers a reminder of debt payments that they might have unnoticed and overlooked. Since it is in letter form, customers won’t take this reminder personally or in a negative light. But, do remember that sending reminders have to be done several days prior the due date. Make a generic letter for you to be able to use in every situation.
Give Them a Call
If you haven’t received the payment or haven’t heard from your customer after 30 days, give them a call as phone calls are much harder to disregard and ignore compared to letters. In numerous circumstances, when customers or clients are phoned, they usually let the cat out of the bag, revealing why they aren’t able to pay their dues.