If you provide services to businesses, you’re not safe from the collections process. The economy can affect businesses regardless of their size. When a business doesn’t pay on its account, you should go through a business debt recovery process that you have in place. To help you create the process right for your business, we’ve put together this list of tips.
Categorize the Business Client
Doing this helps you determine the true likelihood of whether you’ll be able to collect on your own or if you’ll have to get professional collections help. In general, there are three categories:
- Businesses in legitimate financial distress. They want to pay, but they honestly can’t afford to pay on their account. With this category, you can generally work with the client to determine what they can pay so that you still have some money coming in from the account.
- Businesses who are juggling their bills and trying to stay caught up. It’s likely that they were late paying your invoice because they had to pay a different vendor. They usually have funds, but they may be experiencing a temporary financial hardship as they try to collect on their own past due accounts. With this category, you can help your client come up with a way to get the invoice paid.
- Businesses who go out of business or file bankruptcy. In these cases, you may not be able to get paid. There would be several other factors that would need to be considered.
Start Follow-Up Early
Don’t wait for weeks or months to start the follow-up process. When it comes to business debt recovery, you must start follow-up within days of an account going past due. This helps you determine which category the business client falls into or if it is possible that the missing payment was simply an oversight.
Make sure that you follow-up when clients tell you that they can pay you on a certain day. Call and offer to take that payment over the phone or, if the client is in your area, you could even offer to stop by and pick up the payment.
Look for Solutions
For the first two categories of business clients, remain a source of solutions. Remember that it isn’t that they don’t want to pay you. Look for solutions that work for both you and your client. Can your client pay if you give them a discount? Can your client take advantage of a lowered amount on their payment plan?
Get Professional Help with Business Debt Recovery
Finally, get professional help with your business debt recovery needs. When it comes to collections, you must ensure that you or your employees follow all federal and state laws related not just to debt collection, but also to what is said on the phone, through the mail, or through any contact with clients. Getting help is one way that you can know that those laws are followed. Clients ARM has more than 30 years of experience helping businesses just like yours get paid. Our collections rate is better than 90% and we provide both first-party and third-party collections. To learn how Clients ARM can help you, schedule your free consultation.