Debt collection can be a major headache for small business owners. Not only is it frustrating to deal with, but it can also be extremely costly. This blog post will discuss six efficient ways to deal with debt collectors and get your debt under control!
Don’t Do It Alone
It’s important to note that you don’t have to do this part of the job on your own. Many business owners hire a collection agency when clients are hesitant to pay an outstanding balance. This is a great way to not only ease your stress but also increase your chances of receiving payment.
There are many different agencies to choose from, so be sure to do your research before selecting one. Make sure you select an agency that has experience working with small businesses and that will work on a contingency basis.
Set Strict Billing Terms
Before you start signing contracts, make sure your clients know your billing terms. It’s important to be clear about when you expect to be paid and what the consequences are for late payments. If you don’t have strict terms, you may find yourself chasing down payments or even having to write off unpaid invoices.
Offer Easy Payment Options
There are various payment options that will make the process easier for both parties. These are the following:
- Credit Card
- Direct Debit
- Online bank transfer
- Money order
Each has its own advantages and disadvantages, so be sure to choose the one that best suits your needs.
As soon as the payment is late, you should start sending frequent reminders. You can do this by sending emails, texts, or even making phone calls. The sooner you start sending reminders, the better chance you have of getting paid. If you decide to send the reminders yourself, be sure to keep a record of when you sent them and what type of reminder it was.
Negotiate New Deals
Try working something out with your customers or clients. If you have a good relationship with them, negotiating new deals may be an option for you. This way, you can collect the debt without having to resort to more drastic measures. Plus, it shows that you’re willing to work with them to find a solution that works for both of you. Win-win!
Of course, this only works if you actually have a good relationship with the person or company you’re negotiating with. If things are tense or there’s bad blood, it’s probably not worth your time to try and work something out.
Take Legal Action
Your last resort should be taking legal action to recoup what’s owed to you. This is a big decision and not one to be taken lightly. Taking someone to court can destroy relationships and taking the wrong legal action can be costly. Before taking any steps, consult with an attorney specializing in collections law to get advice tailored to your specific situation.
Debt collection can get pretty nasty, which is why you should hire someone to do it for you. Make sure to set strict billing terms and offer easy payment options. When they’re late, you should send out reminders and try negotiating a new deal so it works for both parties. Finally, if they’re still hesitant, you should take legal action!