With most of the business owners experiencing lots of cash flow problems for the last 12 months, it is advisable to ensure that the business owners are ready to deal with customers who have outstanding debts. According to recent research, debts due by one month have a 93.8% chance of being paid with 3 month old debts having a 74% repayment chance. It is therefore important for any business owners to have a proper and efficient debt recovery process in place to help in the recovery of debts. Here are five important tips that will help any business owner to recover his or her debts quickly and professionally.
1. Ensure your Terms are agreed upon
It is important that you place emphasis early in the relationship. It is therefore important that you have all the terms and conditions signed by all the parties since it will create a binding contract that will spell out expectations and responsibilities for all the involved parties. The signed terms and conditions can be used whenever matters escalate or in case you are in need of a professional debt collector or if you intend to take legal action.
In case you fail to outline your terms, you might be left at the, mercy of your customers’ payment process thereby affecting your ability of maintaining a strong cash flow.
2. Always Put in Writing
In case your phone conversations have never been that positive or the payments are still outstanding, you can consider putting it in writing or sending your client a letter to help in debt recovery Spain. The letter should outline breach of the agreed terms, the outstanding balance and record of your attempts in contacting them when seeking your balances.
3. Always Call the Client on a Regular Basis
Calling your client who has debt at least once a week is important, effective and economical compared to sending written debt collection communication.
Ensure you are confident when speaking to your client and always prepared for the responses by having a follow up process for whatever they will say. For example, if your client claims they have never received the invoice, then you can email them a copy when they are still on phone and confirm if they have received it.
Ensure you ask them when they will make the payment in order to understand the exact date when your overdue debts will be paid and close the call by confirming the payment method and the date. This will help confirm the debtors’ commitment and having a verbal confirmation of when their account will be reconciled.
4. Engage a Debt Collection Service
In case all your option has been exhausted and you are still unable to collect your payments, it is advisable you engage the services of a professional debt collection agency. In case there are no signed contracts with the customer, you can make sure you have a record of the work done and many details to help the agency in recovering your funds.
Any good debt collection agency will help you collect all the important information to ensure they will be able to recover all the money you are being owed.
5. Be Calm and Cool
Frustrations and emotions can easily get better of us when our clients fail to pay their bills. It is however important that we always keep our emotions in check as it will enable us to think clearly and work out the best solution of getting paid on time.
In case you discover or informed that the debtor is going through some sort of financial hardship, you can consider offering him or her a payment plan option to ensure you will eventually get paid your balances and put the client under less pressure.