If you own a business, you’ve likely had to deal with the non-paying customer and debt collection. It’s an inevitable part of entrepreneurship. Late payments are common in most types of businesses whether your clients are individuals or other businesses. You probably know some of the basic steps to take for debt collection, but what can you do when your customers won’t or can’t pay?
Debt Collection Steps for the Delinquent Customer
You’ve sent a past due notice and called the customer. If there hasn’t been a response what is your next step? Do you continue to call them? At what point does this slip into harassment?
It’s easy to be frustrated by a past due account; its worse if you feel you’re being ignored. But is there a way to handle the situation without running afoul of debt collection rules? How can you pursue debt collection in a positive yet effective way?
Doing an internet search usually yields more details that seem to be in favor of the past due client than the business owner. That’s because there are both federal and state laws that govern the collection of past due accounts. Not following them could subject you, the business owner, to hefty fines and penalties. So, where does that leave you on debt collection?
Here are three debt collection tips for small business owners:
- Evaluate your billing process: One step to add to your client billing process is to talk candidly upfront about the service, the cost, and the terms of the service or product is purchased. Make sure your customer is aware of the cost and payment terms as part of the buying and selling process. Addressing this candidly up front may help you have better luck during the debt collection process.
- Leave emotions out of it: The second thing is to consider that you cannot take the debt collection process personally. The past due client may have a very good reason for the late payment; such as they didn’t even receive the invoice. Sometimes a simple reminder by calling, emailing, or sending a letter may remedy the problem. After 180-days of non-payment, some companies write off the debt or call for help from a debt collection professional.
- Partner with a professional collection agency: If pursuing debt collection on your own is getting you nowhere, it might be time to contact a debt collection agency. Rocket Receivables is a different kind of company. Our online service provides even the smallest of businesses with a low-cost way to pursue professional debt collection. We offer fixed-fee early stage debt collection services for accounts typically less than 180 days past due . Or, for more challenging to collect accounts or accounts past 180-days, we offer a contingency service that includes a more traditional collection approach including letters and calls from professional debt collectors.
Are you ready to leave debt collection to the experts so that you can focus more on managing and growing your business? Start collecting more with Rocket Receivables today.