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Debt collection made easy for your business

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Every business at some time experiences a customer who is either a slow payer, or worse still, refuses to pay at all. Few people enjoy harassing customers for unpaid accounts, but essential telephone skills go a long way to getting payment. Bad debts can bring a good business down, so be sure to have a good support system when calling to collect.

Be clear on your payment terms from the very start – they should be firm, not flexible.

Don’t make the mistake of being lenient with new accounts under the guise of establishing a good relationship. This sends the message that your payment terms are flexible and gives them permission to take advantage of you. Once an account is overdue, no matter who it belongs to, follow it up.

Some businesses have a client so crucial to their business that they are quite generous with their payment terms. A client should make, not cost money. If you present yourself as a low-priority creditor, they will treat you as such.

The hard questions

 

Rehearse your answers the curve balls that might compromise your cash flow!

“I didn’t receive the invoice.”

“I’ve got it on file here…” (which, of course, you do!) “… It was sent on [name the date]. I’ll forward you that email so you have it in front of you. Please note the terms from the date of invoice raised stands.”

Hint: Be sure to send them the original file and follow it up with a phone call to confirm its receipt.

"I’m not the person who deals with the invoices.”

“Please let me know who that is. I’ll amend the contact details and send that straight through.”

Hint: do this straight away and call the new contact so they’re aware it’s there.

“Cash flow’s tight at the moment – we just don’t have the money to pay you.”

Ah, this one is a tricky one and on no doubt you have fielded yourself!

For larger payment plans, negotiate a payment plan and be sure to secure and a large, immediate instalment.

For a smaller business, suggest they pay via credit card, as this will give them between 30 to 51 days, depending on their bank, to pay.

 

Work on your business, not in it. To learn how, book a complimentary business assessment today with a Switzer Business Coach.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

 

Published on: Tuesday, May 04, 2010

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