Effective debt collection strategies for business owners

If you provide high-quality goods and services then it is only fair that you receive prompt payments. Even successful companies struggle with issues of debt collection from time to time. With the potential for a coming recession, establishing strategies for successful collection practices may help you stay ahead of the problem.

Stay on top of invoicing

You may have a lot of repeat customers who you have built good relationships with. In such situations, it may be tempting to put less formal agreements in place. This is never a good idea. All customers should be treated the same when it comes to payment. Issuing an official invoice should be standard protocol. You also need to ensure that both you and your customers have copies of these invoices. Nowadays, the majority of files can be stored safely online rather than having physical filing cabinets of invoices that could get lost.

Review your payment options

Society is increasingly moving toward becoming cashless. While there is nothing wrong with taking cash payments as long as they are recorded appropriately, your clients may find it easier to pay electronically. This can also benefit you as payments can go through instantly and there will always be a record of the transaction whatever happens.

Use reminders for late payments

Late payments will happen from time to time and they will not always occur due to malice. A client may simply have forgotten the date or used the wrong account by mistake. Thus, you should have a reminder system in place that alerts your customers to an upcoming payment date. If they are overdue, this can often be resolved with a brief conversation.

If you have tried all of this and are still owed money, it may benefit you to look into your collection options. This isn’t something you want to address on your own, so make sure you have legal guidance. We help companies with all manner of business problems, including collections, so contact us for a consultation.