Just about every business we encounter wants to make the process of getting paid on time much easier. Getting late-paying customers to the table and small business debt collections can become an area where many organizations just do not have the available resources.
Take, for example, the lawn care company that works from sunrise to sunset and deals with a labor shortage. Implementing an easier method to collect payments becomes mission-critical for that business.
If your business has been struggling with cash flow and getting your customers to pay on time, check out these four tips our debt collection experts have come up with to make getting paid on time easier for any size organization.
Be clear on how and when your business expects to be paid
Making debt collections easier for a business starts well before there is an issue. It starts with informing your customers how you expect to be paid. Your payment expectations should be simple, clear and easy to understand for every customer. Many small businesses hesitate to speak in detail about how they expect to be paid, mainly because they are intent on pleasing the customer initially. However, if we avoid informing the customer regarding the details of payment structures, we are laying the groundwork for a future dispute.
At the start of a business relationship, be clear about how you expect to be paid and when those payments are due. To make collecting payments easier in the future, put this in writing and issue it to every new customer.
Maintain detailed records of all your accounts
What does meticulous accounting in your business have to do with debt collections? Just about everything. The last thing you want when trying to collect a debt from a customer is a discrepancy in the amount owed. When inconsistencies occur, you’ll be faced with more questions regarding the amount owed, it will take longer to settle the dispute and it could even hurt your credibility. Detailed recordkeeping and accounting will make the process of collecting late payments easier if the need arises. If you feel your internal accounting methods are hurting your business, it’s time for a thorough review with your bookkeeping staff and CPA.
Stay calm when asking for payment
Keeping your cool when trying to get customers to pay their past-due bills can be tough, depending on how outstanding the invoice is. However, to make collecting debt from your customers easier, you must remain calm and treat those individuals with respect.
Losing your temper and getting angry with customers will only impede your ability to settle a dispute.
There are several reasons to remain at ease when trying to get customers current on their financial obligations. The first, is it’s just the right thing to do. Treating people with respect is just common sense. And having cordial conversations with your customers allows for improved communication, which can lay the groundwork for getting paid. And during these conversations, you may identify a legitimate reason for that bill not being paid. So if you want to make debt collections easier for your business, be nice.
Hire a collection agency that understands your business
Many internal methods make securing payments from customers easier as you have seen. But oftentimes making debt collections easier requires third party help. And that’s why working with debt collection professionals who clearly understand your business is not only a smart move but an essential step in easing the cash flow burden you may be dealing with.
How does a collection agency make securing overdue payments easier?
One of the ways the right agency can provide your business relief is by freeing up your internal resources. Depending on the number of outstanding accounts, your staff or even you as a small business owner, may be spending hours a day trying to get paid. If nothing else, you have hired professionals to put in the time to contact your late-paying customers.
But more importantly, debt collections become easier when you put trained professionals in charge of communicating with your customers. Professional debt collectors take the time to understand why a payment has not been made, and can also methodically lay the groundwork to help that consumer meet their payment obligations.