Great Debt Collection Tips for Beginners
According to the Urban Dictionary, a ‘newb’ is short of ‘newbie”, a term used to “describe a inexperienced gamer/person/etc. Unlike a noob, a newb is someone who actually wants to get better.”
If you’re a newb in the world of operating a small business, then this article is for you!
If you haven’t already encountered a late-paying client, chances are good that you’re going to face the issue. There are a lot of articles here on our blog that will help you learn what you need to know about collecting a past due invoice, but in this article, we’re whittling our tips down to the very basics especially for newbs.
1. In the Beginning Was a Clearly Outlined Payment Policy
Get your payment policy down on paper. Decide on your terms – make them crystal from the start. Print the document and go over it with your new clients. Discuss the terms and invite questions.
2. Request a Merchant Statement at the start of your business relationships
We’ve covered this topic in greater detail in a previous blog titled: The Role Of a Merchant Statement. But in a nutshell, Merchant Statements can serve as a benchmark for future investigation should the need arise.
3. Use Email as your primary source to send Invoices
Once you’ve established solid email communication with your client, submitting invoices by email is the best way to go. After all, it’s a little hard for your client to argue that he didn’t get the invoice when all the other correspondences by email were received just fine.
4. Follow a Timeline for follow-ups
Our recommended timeline for collections article will help break down an acceptable and reasonable schedule for communications. Most of the time, a quick phone call or email will prompt a payment. But you have to follow up promptly when an invoice is late, because the longer the invoice goes unpaid, the more likely you’re going to have to work harder to collect it.
5. Before you make a collection call
Have your client’s file with the facts in front of you so you can reference them if you need to. Focus on 2 things: getting paid in full same day AND keeping a great relationship with your customer. You can do both! If it’s your first collection call to that client, make the assumption that the late invoice is an oversight.
6. Keep great notes
You’re gonna thank us later if you follow this advice because no matter how great your memory is, you’re not going to remember the ‘deal’ you made with your late paying customer. That’s one reason … but there are even more good reasons to take good notes!
7. Get help if you need it
Don’t wait until things are a real mess to get the help you need. Our article, 7 Signs It’s Time to Use A Collection Agency can help you determine when it’s time to get the help you need.
You don’t have to collect like a newb! Collect like a pro with our commercial debt collection tips! Subscribe to our blog to receive more great tips!