At some point or the other, every business is likely to be subjected to a situation where a client does not pay on time, cannot afford to pay the whole amount, or even worse, refuses to pay at all. Such situations are bound to frustrate you so it is crucial that you respond promptly and effectively to it. Sometimes, customers are simply notorious and try every means to avoid payments. Often customers have a lot of payments due and choose to pay it off sporadically. And then, there are customers who usually pay timely but due to some unavoidable financial crisis, cannot do so this time. Whichever be the case, you should understand that no matter how good a relationship you have with your client, getting the due payment for the products and services you have rendered is your right.
So, what you have to do is think of effective strategies to ensure you can smoothly process your business debt collection. Here, we have put together a few tips for you. Take a look.
Keep Records & Maintain Professionalism
If you have to take legal action or file a complaint, you will require concise and clear records of the actions and events. You must have the proof that you had taken every step possible to recover the debt before taking a legal step. Keep in mind that you should always be respectful, try to understand the perspective of the debtor, be attentive and take notes of what they are saying. If there is an anomaly in the documents, record it with you as it may be an indication that the debtor will not pay. Don’t be manipulated and stick to a professional attitude.
Take Preparation for the Excuses
When you embark upon the process of debt recovery, you have to be prepared for one thing- excuses. Your client is likely to come up with a list of excuses to justify the delay in payments. If you are prepared with good responses to deal with such common excuses, then it will give you more confidence to recover the debt with more focus and firmness.
For instance, if your debtor says that they are filing for bankruptcy, then you should promptly ask the name of the trustee. Or if they say that the check is in the mail then you should ask for the details of the transaction including the receipt number, bank name, and date of posting. Your debtor might also give you an excuse that they don’t have a copy of the invoice or are awaiting client payments. In such cases, you can remind them about the terms of trade that was agreed between both the parties or simply send them the invoice once more and stay on the phone while sending it so that you can confirm the debtor has received it. It is due to this reason that creditors are asked to record and document the receivables and invoices.
Employ Debt Collection Agencies
Although you may be focusing on implementing the above-mentioned tips, the truth is not everyone has the skill to execute the ideas successfully. That is precisely why you need debt collection agencies. These agencies are skilled in every trick and trade of debt collection and recovery. Every business owner is not firm and cannot act judiciously at the appropriate time, or might have a softer nature. Usually, the debtors might take an advantage of this. A debt collection agency is experienced in dealing with such situations and knows how to get the payment out of a debtor. They will be able to track down your debtor more easily and help you acquire your payments sooner, thereby saving you time and allowing you to deal with other fundamental concerns of your business without being subjected to any legal battles.
Seek Legal Assistance
If you have tried and tested everything with no result, then you may consider seeking legal advice for this. Contact lawyers who will be able to guide you through the actions that must be taken in order to collect your debt. Usually, you might have to issue a complaint, undergo the service of the complaint, and then receive the judgment or the payment. Generally, your chances of debt collection are likely to be diminishing after 6 months so make sure you hurry up with the legal procedures.
So, quickly start implementing the above-mentioned tips, whichever may seem doable for you and get started on recovering your business debt. All the Best!
Arnold Lee, a regular blogger on business debt collection here he gives us a few effective tips that will help you recover your business debts such as keeping records, hiring a debt collection agency, or taking legal action.