- March 12, 2015
- Posted by: Taurus Collections
- Category: Uncategorized
Time is money, and for small businesses any wrestling around with debt collection could leave you on the losing end, even if you get your dues. Having a game plan before the problem of a non-payment from a customer is important, no matter how great your customer base is, it can mean the difference between life or death-of a business.
Maximizing Profits while Minimizing Losses
Your first goal, no matter how likely or serious the customer is about paying their debts owed, is to move fast and keep a strong resolve. When considering cash flow for businesses, you shouldn’t play favorites or treat any debts as a special case. Immediately send invoices and pursue late fines and make it urgent that they contact you about making payments. If you try to be too personal and allow them to drag out their responsibilities over the phone, you are going to be less likely to collect and more likely to be wasting your time.
On the contrary, if you have sent invoices and left them messages, it is important to allow time for a response, otherwise this will scare them off and make them think it’s too late and they might just ignore your attempts to contact. The customer would rather speak with you than a third party collector, so use this opportunity to make them feel comfortable, but get them to commit to paying something before hanging-up.
Cutting your loses, so you can get back to business
When your own personal attempts to collect have been exhausted, then you must hire a collection agency that can continue the steps that will give you the best chance at collecting your money and putting it back into your cash flow. Whether that means settling for a reduced cut than what is owed, it doesn’t matter at this stage. The customer is either someone who has no intention of paying or cannot afford to pay the full amount, so you shouldn’t try to squeeze blood out of a stone.
Cash flow for businesses has never been more important. You must weigh the options of taking it upon yourself to file a lawsuit and spending a day in small claims court or using a third-party that can offer you more tools to reinforce your internal operation and outsource further debt collections as you see fit. As your company grows, so will the issue of debt collection, so be prepared and model your needs for the long-term, then you will no longer need to divide your time away from what’s important: making money!
If you are having cash flow problems in your business and would like to chat about debt collection, or our popular invoice finance scheme as a more sustainable solution, please don’t hesitate to contact us on 01332 565350 or email firstname.lastname@example.org