Keep The Lines Of Communication Open
Running a business can be a rewarding and fulfilling experience but also frustrating. One of the major concerns many business owners face is small business debt collection. As a business owner, your time is better spent pursuing and building your business and taking caring of your customers, not collecting debts. Delinquent accounts not only tie up hours of precious time but also cash flow, the life blood of any business.
Fortunately, there are steps and resources available to the small business owner to help collect on delinquent customers. Before delving into possible solutions to debt collections, you should first consider this important fact. If a debtor is behind with you in his account, then he is probably behind with other accounts with other vendors. If this is the case, it is incumbent on you as the creditor to be diligent in collection of money owed to your business. If the debtor hears from you often he will soon realize you aren’t going away until the situation is resolved and the debt paid in full.
Now, let’s move on to possible solutions to your small business debt collection problems. First, the debtor needs to know of your intent to vigorously collection on the debt. Once the thirty day delinquent status is passed, immediately send documentation directly to the debtor advising them of the past due status and remit payment immediately. Also make sure to let them know should they be having difficulty making the payment, they should make contact with your accounts receivables department and work out payment arrangements.
If after ten to fourteen days you have received no response from the debtor, you should then call them and speak with them about the debt. If they cannot make the payment, then you should make an attempt to offer some form of installment agreement re-payment plan to collect the amount over time. The last thing you need is for all communication to be shut down between your business and the debtor. Strive to keep the lines of communication open.
If attempts to reach the debtor by phone are unsuccessful, it will be necessary to post another letter making them the aware of the seriousness of the issue and if they have not responded within seven days, the services of a collection agency will be commissioned in order to collect the dent owed. In most cases, businesses as well as individuals prefer not to deal with a collection agency.
The biggest mistake you can make in small business debt collection is losing the lines of communication with the debtor. Always attempt to keep some form of dialogue going on between your business and the debtor. Once the lines of communication grow cold, in many cases you have no other choice but to employ the services of a professional collection agency or eventually file a lawsuit in order to obtain a court judgment and the proceed with judgment recovery through the civil legal system.