Top 6 Debt Collection Tips for Small Business Owners
An unpaid invoice is probably the worst nightmare for any business. It hampers cash inflow, productivity, and eventually, the growth of your business. However, unpaid invoices are far more common than you know in business. It is challenging for small businesses to deal with debt with minimal resources and tight budgets. If you are worried about your cash flow, there are specific steps you can take to improve your debt collection.
Here are some tips and techniques you can try to improve your debt collection process.
1. Use multiple channels of communication
The digital era is here, and there is no longer a need to wait for the due date to fall or send postal reminders to your customers to pay dues. You can rely on fast communication means like emails, phone calls, and texts to gently remind them about the due invoice.
2. Follow-up is a must
When running a small business alone, you have to put on several hats, and it can be overwhelming to keep track of everything. Due to this, you may miss out on making follow-up calls with your customers regarding their invoices. However, this misstep may be more costly than you think. Consistent and timely reminders can work wonders for your customers regarding bill paying.
3. Have a good credit control policy
Customers often easily pay their dues with reminders or as soon as they have the money. However, specific customers intentionally don't make payments. You need to be cautious about such customers. Do a credit check before you make deals with your customers. Be more diligent with customers who have lower credit scores.
4. Give them options
You may never know why the customer cannot pay; hence it is crucial to understand what's troubling them. If your customers are struggling financially, you can offer them several payment options to reduce their burden and ensure that you get payments rather than get nothing.
5. Encourage credit card payments
If you don't allow credit card payment on your website or in stores, it's time to do so. Enabling credit cards may cost you some fees, but it is better than having unpaid invoices that you have to chase later on. The resources you spend chasing unpaid invoices are often more than credit card payment fees. You can ask your customers to automate your payments like subscriptions to ensure timely payments.
6. Hire a debt collection agency
If you have tried everything at your end and the customer is still not paying, you may need to seek outside help. You can take legal action against the customers, but it is lengthy and time-consuming. Hiring a small business debt collection agency like DebtCo Holding can help you get your money quickly and efficiently.
DebtCo is the only all-service debt collection agency you need for your payment collection woes. We have developed an innovative digital debt collection platform that can take care of all your collection problems, regardless of your industry. You can reach out to us at 01376 800 592 or request a meeting to know more about business debt collection.