7 Debt Collection Tips for Small Business
1. Run a credit report
Reduce the risk of a debt collection overdue by running a credit check on your potential client and check references on their status before the sale is completed. If your client deals with low accounts and bankruptcy, there must have been signs. Reach out to the potential client’s partners bank and run an account check.
2. Communication is key
Be clear to your customer about payment expectations. Before completing a sale, establish a payment policy and make sure the customer agrees to the terms. Be polite, short and professional in order to create loyalty.
3. Put your policy in writing
Write down the collection policy and give a reference, including your invoice payment terms and late fees on customer documents and invoices.
4. Do monthly reviews and checks
If you do monthly controls and check if your customers are paying you in time, you will avoid collection issues. There will be notice on non-payments and further steps can be taken.
5. Send a reminder
If you don’t receive money by the due date, send a collection letter. Always save copies of collection documents for your records. Send reminders periodically with all the information that a customer needs to pay you.
6. Take action
Despite the fact, that as a small company you want to maintain a good relationship with your customer, it is important to act quickly and take action when it comes to debt collection. If you take a passive attitude you can wait a long time to see your money get paid. Show that you take outstanding invoices and financial administration in your organization seriously. Keep things short and professional.
7. Call in the professionals
Keep in mind your goal; collect the debt of your customer with the least amount of effort and cost. If after several tries your debtor still hasn’t paid their debt, it is time to call in a specialist. Bierens Group is a law firm that specializes in B2B debt collection. Our team of international professionals can help you collect your debt anywhere in Europe.