It doesn’t matter if your customer is someone you know personally and have a great relationship with or a new customer that you have no relationship with — you have not only an obligation, but a right to collect any money that is owed to your business. Collecting debt is never easy, however the key is to be strategic in how you approach these situations.
1. Stay Calm
When you’ve provided services for a customer and they don’t pay you on time, It is natural that you would be upset. However, it’s important that you take a deep breath and stay calm. The angrier you get, the more likely your customer will sense your anger when you attempt to speak with them about collecting their debts. This will make the entire process much more difficult and make your customer unlikely to willingly cooperate with your demands.
2. Know Your Rights
Without professional training in accounts receivable or debt collection can leave you blindly stumbling your way through the process of collecting payments. It is extremely important that you educate yourself on your rights and legal options. The more educated you are, the better off you’ll be. You will become confident in your interactions with your customers when you begin to understand the actions that can and can’t be taken, so that you can move things along.
3. Document Everything
Documentation is very important when it comes to small business debt collection situation. Should the debt ever lead to a legal battle in court, your ability to point to the documentation will be very helpful. Each time you talk to a client on the phone, record the phone call and take notes. Certify and copy every letter you send in the mail and Save email all correspondence. Log any visits you make to the client’s office or home. All of this information could prove useful in court should it come to that.
4. Avoid Harassing
With emotions high when a customer refuses to pay their debt, it is understandable to be upset. However there’s nothing helpful about harassing a customer who owes you money. Persistence plays a key role in collecting on a debt, there’s a fine line between persistence and harassing.
Harassing is calling a customer every single morning for 60 straight days, yelling at them they need to pay you. Persistence looks like calling every seven to ten days as well as offering options for your customer to start paying off some of the debt.
5. Offer to Settle for Less
Let’s say a customer owes you $1,000 and is 120 days past due. Regardless of your tactics to collect this debt for the past four months, you feel confident that you will never see this money. Now Before simply writing the debt off, try offering to settle for less than you owe. If you come to your customer and tell them you’re willing to take a reduced amount, often they will jump at the chance to get it off their books. While you considered it a loss to begin with, getting a percentage of the money you’re owed is better than nothing.
6. Hire a Collection Agency
If you have a substantial amount of outstanding debt owed to you and you’re spending a lot of time and effort trying to collect on it, it may be worth your time to hire a collection agency. Not only will this save you time and possibly allow for better results, but it could keep you out of legal trouble. Registered debt collection agencies understand the intricacies of the FDCPA and you can avoid putting yourself in a compromising position by working with them.
TSC Accounts Receivable Solutions is the perfect solution for you. We not only offer a variety of services to aid in your debt collection efforts, but all of our debt collection specialists are specially trained in the industry they work in. If you’re interested in finding out the benefits of having a debt collection agency working with your business to collect debt Please Call us at: 760-444-5526.