- January 26, 2021
- Posted by: Taurus Collections
- Category: Blog
There’s Never Been A More Important Time Know How To Collect A Debt From A Customer
If you are wondering how to collect a debt from a customer (and let’s face it all business owners should sit up and take note of this as we start getting into 2021), we have put together a simple step-by-step guide on the most effective strategy to maximising your collection efforts, and thus increasing cashflow for your business.
Remember cash is king. If you are not applying certain techniques and learning tried and tested methods of how to collect a debt from a customer, then you company will struggle to survive. This could quickly result in a slide to insolvency. This is what we see in the most extreme cases. Its therefore imperative that you implement strategies into your credit control process that will see results quickly and without wasting time (i.e simply chasing over and over, with little or no results).
How to collect a debt from a customer
So here are 3 steps to maximising your efforts when understanding how to collect a debt from a customer:
This is where it all starts. Make them clear, concise and crucially make sure they include details of how to pay you! Sort code, acc number, tel. number to pay by credit card, paypal ID, address to send cheque to. Remember an invoice is a “notice to pay” so make it clear it needs to be paid.
Schedule calls to your customers “at least” every 7 days. Send a minimum of 2 letters and call 2 times before ever considering issuing legal proceedings through a solicitor, or passing it to 3rd party debt collectors. Your customers will appreciate being reminded to pay as often Accounts Dept can get bogged down and they only pay when they are chased. You must get your debt to the top of the pile!
Never delay action on a late invoice past 50 days. If you have had no response by this point as in-house collection of debt, you should quickly pass to legal dept or 3rd party for collection. Timing is everything and the customer may have serious financial issues or be closing down. So it is important to move fast.
So there you have it, a 3-step plan to help you learn how to collect a debt from a customer. This will put your company in the best possible financial position when it comes to maximising debt collection efforts.
Drill this into your credit control team! Take it from us: if your company doesn’t have a strategy for debt collection and escalation, then your company may face a downward slide to insolvency. We see it so many times, particularly with the pandemic economic impacts kicking-in. But with care and good management your company can prosper. And it all starts with good debt collection practices.
Remember: timely collection of debts are the oxygen of any business!
If you would like to speak to one of our agents about no win – no fee debt collection and how to collect a debt from a customer, to help your business prosper in 2020, please don’t hesitate to call us 01332 565 350 or email email@example.com