Almost every small business owner has had too much experience with customer debt lately due to the strained economic situation in the U.S. and many countries around the world. In many cases, it’s a Catch 22 situation where you can’t pay your lenders and suppliers until your customers pay you. The other drawback is that you also have trouble making your monthly bills and weekly or bi-weekly payroll obligations because you’re short on cash.
As a small business owner, you know how difficult it is to get a late-paying customer to settle up. Lately, you’ve noticed more customer debt and more difficulty in extracting payments from them. You want to use a gentle hand because you’re afraid that if you get too aggressive, you’ll give the late-paying customers motivation to paint your brand in a bad light. You’re also wary of bringing a third party debt collection agency in for the same reason, but you might be wrong on that assumption.
So what can you do to make sure your invoices are paid?
1. Tactics that have worked for some organizations include calling the customer a few times to remind that they have an outstanding account. The use of email can also be effective for customers who are more apt to see their statements online and prefer to pay that way as well. Emails are much less labor intensive than having employees make calls everyday.
2. Have you offered your customer base convenient payment options? As you’ve realized by now, some customers need every option put in front of them before you’ll get a reaction from them. Many of them will have a difficult time finding a time to come to your place of business, they need more convenient options. You should have either a toll free number they can call to set up payments, or better yet, a secure website where they can enter their account information and make timely payments or automatic payments.
3. When you’ve extended as much time on a late payment as you can handle (90 days for many organizations), it’s time to step up your attitude. You’ve been polite and offered your customer options. Keep your polite tones but start telling them you’ll be forced to send their account to collections if they don’t make an attempt at payment.
4. When your reasoning fails to illicit a response, get attorneys involved. It’s amazing what a letter from a law firm will do to inspire a non-paying customer to get on their feet.
5. Your best bet is to partner with a professional debt collection agency that has the expertise to converse with your clients on your behalf and get them to pay without your clients feeling like they’ve been pressured unfairly.
Omega-RMS, llc. is a debt collection company with several services that keep your clients’ accounts on a payment schedule that will keep your cash flowing and your opportunities for growth wide open.