Small Business Hacks: 5 Tips for Successful Debt Collection

Many business owners feel uncomfortable and awkward about collecting money from clients—so much so that they leave it to the last minute. This eventually causes major cash flow problems for their business.

Although debt collection is not exactly the most exciting part of being an entrepreneur, it’s an essential in making sure your company not only survives, but also thrives. To make this process less awkward and more successful, here are some simple tips you can follow:

  1. Take a More Positive OutlookStart the process with a more positive attitude. Don’t take it personally if your customers are not able to pay their invoices on time. Find out first why the bill is late. Chances are they had simply forgotten that it was due because they were swamped with other important tasks. It’s also likely that they lost the invoice. In cases like this, a friendly follow up email or call would straighten things out and help you collect payment right away.
  2. Gradually Increase DirectnessAlthough friendly reminders and follow ups are ideal at the beginning, you will need to slowly increase your assertiveness over time. You can start with a call, email, or letter that reminds your client of an overdue invoice. Make sure this communication has a positive and helpful tone. Find out what you can do to assist them in completing the payment. But if the invoice is still unpaid by the third collection correspondence, you can use a more assertive and direct tone. Of course, you must maintain absolute professionalism the entire time.
  3. Invoice Using Multiple ChannelsWhen sending invoices and follow ups, be sure to use multiple channels. This way, you can cover all the bases and ensure a more efficient collection process. Don’t rely too much on sending emails as these can easily be buried and overlooked, especially if your clients have overstuffed inboxes. Perhaps start with a call, then follow up with an email or a official letter to be sent out by registered mail.
  4. Call in the ExpertsIf your invoice remains unpaid after several follow ups, then it’s time to contact a professional debt collection agency. Here are Slater Byrne Recoveries, we have a team of specialists who are dedicated to helping you collect on your outstanding accounts and secure your cash flow. We’ll take the burden off your hands so you can focus your time and resources on other tasks that are essential to your bottom line. Call us today at 0800 445 870 to find out more about our services.
  5. Always Run a Credit CheckSignificantly reduce your overdue accounts by conducting credit checks on all of your potential customers before doing business with them. Proper credit checks will allow you to assess financial capability of potential customers so you can make better decisions when extending them credit. Although this process might cost you a bit more, it’s a worthwhile investment for the long-term success of your small business.