We have six tips to help you with collecting past due accounts. Here’s what you need to know.
If you’re running a business, one of the most frustrating activities is trying to collect on money that’s owed to you. When you’re first starting out, collections is often crucial to cash flow, but even as a business grows, past due accounts receivable are important to the bottom line.
This article explores the best steps to take to recover customer debt and it provides answers to common questions…
- Can a business make mistakes and be penalized for deviating from these best practices?
- Are there any safe steps a business can take as a DIY approach?
- What are the benefits of partnering with a collections expert like Rocket Receivables?
We have six concrete tips to help you with collections:
1) The first is simply a bit of advice; don’t be frustrated. Getting upset over a past due balance puts all the power back in the hands of the debtor. In fact, it’s possible that the account may be a misunderstanding; if your bills are not clear, it’s possible that the customer just made a mistake. Or, if the client does not have a history of non-payment, could it be possible that this is a temporary set-back in your relationship. If you can’t avoid taking it personally, it’s probably best to leave collections in the hands of a professional.
2) Next, please be sure that you understand the myriad federal, state, and local rules governing collections. If you’re not using a professional collections service, then it’s imperative that you read up on what you can and cannot do when attempting collections.
3) Documenting the debt is particularly important, especially if you believe the customer will end up in litigation. Every customer contact should be documented, this includes saving emails and writing down conversations in addition to certifying any letters sent.
4) Be cautious in your communications with these customers. You don’t want to have the appearance of harassing them. There are rules surrounding how you should reach customers. Using a service like Rocket Receivables will keep you from falling into the “harassment” category.
5) Know when to settle for less. While this advice may rankle, sometimes getting 75% of a huge debt is really the best you can do – especially if a great deal of time has elapsed. Sometimes it’s best to settle for less.
6) Hire a professional collections firm. Most collection firms can take their fees on contingency, but none offer the kind of guarantee found in Rocket Receivables. Rocket can not only save you time but keep you out of potential legal tangles related to breaking a rule or regulation. We have a great track record of getting back the money you’re owed and the experience that a small to mid-sized business may lack.
Collections may currently be one of the most frustrating parts of your business. But the truth is that it doesn’t have to be. Call on the experts at Rocket Receivables to find out more or click here to buy now.