Dealing with customers who can’t pay their bills on time is something every business owner will have to deal with throughout their career. However, there are some tips you can follow to make past due accounts less of a burden on you and your cash flow.
You know it’s important to extend credit to your clients. You develop more customer loyalty and boost your numbers with a credit program. However, there is some risk involved because not everybody pays on time and some people simply refuse to pay at all. You should have a very distinctly defined credit policy that spells out how your credit works and what’s expected of your customers and past due accounts. Make certain your terms are clearly written and that your clients sign off on them.
Some clients move without telling you where they’ve gone, which means your invoices could be going to the wrong house. However, if you use “address service requested” on your envelope, the postal service can locate the person’s new address for you. This comes with a cost, but it’s certainly less than what you’ll gain from finding the new address and come to terms on payment arrangements.
Companies who frequently contact customers who have missed a payment have more success in getting them to become current on their account. If you jump on them really early, you’ll have an even better success rate.
In your credit policy, you should spell out what action will be taken on overdue accounts. This way, the client can’t be offended by any action you take to get what is yours. For instance, if you say a collection agency will be called in on past due accounts two months old, they should know that a professional collection agent will be calling on them soon after their account is 60 days late.
If you have dedicated staff members for collecting debt, you should make certain they are well trained and know about collection laws in your state. This is where a lot of companies get into trouble – they don’t know how various rules and regulations built around protecting consumers are bent or broken, which can result in lawsuits.
One of the best ways to ensure that your cash flow isn’t suffering due to overdue accounts is to bring a professional debt collection agency on board. They will not only have the expertise and training that helps you get your money back, they’ll do it above board and make sure the Fair Debt Collection Practices Act isn’t violated.
When choosing a professional to take care of your past due accounts, make sure they are licensed to do business in every state. You don’t want a company licensed in one or two states to do your collecting as they are not capable of going after all of your overdue accounts.
Omega-RMS, llc., is a collection company that has a proven record of success. Companies that have brought Omega on board not only see their old debt diminish, they’re also able to put their employees back to work growing the business instead of ineffectively chase down debt. Call us today and find out about our effective solutions for debt recovery.