Collecting commercial debts – are you wasting your time?

In the modern business world, collecting commercial debts can be challenging at the best of times. Coupled with a possible deepened recession and the banks, despite all their bailouts, continually refusing to lend money to SMEs, then your company is likely to suffer cashflow issues right now, or soon will. But there are certain methods you can use to save time when collecting commercial debts, because time is the key to improving cashflow – the less time you spend on phoning your customers, writing to them, threatening to sue them, emailing them to gain payment – the more time you have on growing your business from new sales and spending your time doing what you are good at, and that is running your business.

We have found the biggest reason any clients of ours find our services useful as an outsourced credit control function is: time. Time is crucial in business and by outsourcing duties from your day-to-day activities you can save huge amounts of all important time and energy. For SMEs who want to stay on top of their cashflow, not have the expensive operation of employing a member of staff, and operating on a no win – no fee basis, a collection agency for collecting commercial debts can be extremely cost and time efficient.

Next time you find yourself wasting mornings, afternoons and early evenings trying to call back your customers for that all important payment promise that never arrives, think about instructing a collection agency because your customers will know you are serious about collecting commercial debts.

Top tips:
1. Place an account for collection the earlier the better – our client’s best chances of successful collection is when an account is placed with us as early as possible, usually around 60-70 days after the invoice date. There is more chance your customer is still where they were when they were Invoiced originally, and all contact details are the same.

2. Keep in touch with customers – do not just invoice and then expect them to pay. Reminders need to be sent every week, and phone calls in between which gives a progressive level of seriousness.

3. If you threaten legal, ALWAYS follow through – once you have advised your customer you will progress to legal stage then you must go through with it. If you keep extending the deadline week after week, the debtor will never take you seriously.

Above are just a few tips to remember when collecting commercial debts and should provide a good base for improving your cashflow, or for deciding whether to utilise a 3rd party debt collection agency. If you require any help with your overdue accounts, or simply would like a no obligation chat, please don’t hesitate to contact us

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