The Small Business and How to Handle Overdue Customer Accounts

Overdue Customer AccountsOwning your own business is a challenge. Getting the startup money, finding an office space, setting up bank accounts, and hiring employees are just the tip of the iceberg. The rest of the iceberg is the cost behind each and every one of these. If you have a business, you don’t just make money. You also have to spend money. Those bills have to be paid.

As if running a business and juggling all the ins and outs of just doing business, there is the added pressure of trying to keep up with all the expenses that come with running a business. So what do you do when customers have outstanding accounts? If you aren’t taking money in, it’s not very easy to make payroll or keep the lights on.

What recourse does a small business owner have in regard to overdue customer accounts? Despite a fleeting urge to have a mob heavy go in and break a leg or two, the business owner needs to keep in mind that there is a right way to collect the debt and a wrong way. The right way may just get you paid and the wrong way to put you in jail.

What is the right way? You could hire a Kenyan debt collection agency and then you are personally off the hook and the possibility of prison is gone. Seriously. A debt collection agency takes responsibility for getting the debt paid and many times, the customer will pay up more quickly realizing how serious you are and the risk their credit is in. However, there are steps you can take before hiring the job out.

First of all, make sure the error isn’t on your side of things. Mistakes happen. Make sure your invoice was correct, included all the pertinent information, got sent to the right place, and that your payment instructions are clear.

Talk to your customer. Email and phones are easily ignored, so a face-to-face conversation may serve you best if the option to meet exists. Remember that even if no mistakes were made on your end, that doesn’t mean your customer may not have made one. Maybe your invoice got stuck on the bottom of the pile. Maybe their computer crashed and the payment got lost. Or perhaps they are having some problems and honestly can’t afford to pay you. If cashflow is the problem, you can likely work out a payment schedule that will work for you both.

Here’s a few do-nots for dealing with customers that will keep you out of trouble.

Do not call at the crack of dawn or in the middle of the night. Normal business hours, please.

Do not try to add penalties or fees that weren’t discussed. And do not hold the payment to collect extra fees.

Do not tell anyone else about the debt. Not your family, not the preacher, not your customer’s boss. This is between you and the customer.

Do not lie to the customer about anything or pretend you have more authority or power than you do. Lying is a sure-fire way to end up in trouble.

Do not threaten the customer. Promising to sue them or have them thrown in jail for non-payment is just bad customer relations and sure to win you a reputation you don’t want.

If all else fails, do some research and hire that international collection agency in Kenya to take over. Running a business is stressful enough. Know when to bring in the big guns.