Debt collection is a necessary part of business. With more than 30 years of experience, Clients ARM is an expert at both first and third-party debt collections. Since we know that most businesses start by keeping their collections process in-house, we’ve put together this list of tips to help you get results.
Take the Appropriate Steps to Minimize Debt Collection
There are several things that you can do to minimize the number of accounts that go into collections. Consider requesting retainers or payment in full before services are rendered. With retainers, you hold the money and the work you do is billed against the balance. You remove the money from the retainer and put it into your business account as it is earned. Asking for payment in advance obviously minimizes debt collection efforts because the services you provide are paid for before you do the work.
If you plan to offer credit, make sure that you have an appropriate credit policy in place. Your credit policy should help your business assign the right credit limit to clients. The credit limit shouldn’t be so high that it makes it hard for your clients to pay.
Follow-up Before an Account is Placed in Collections
The day that an account goes past due, follow-up with the client to find out what’s happening. It could just be that the client forgot. It could be that they have a question about their bill. It could be that they have financial problems. Regardless of the “could be” scenario, the older that an account becomes the harder it is to collect on it. So, debt collection should start before the account has aged. Calling on accounts to find out what’s happened the day after they’re due is one of the best ways that you can solve problems and get the money that you’re owed.
Be Prepared to Offer Payment Plans
Consider what you can do to help debtors pay you. One of the best ways to do this is to come up with a payment plan that works for the debtor. If they tell you that they can pay you on a certain day, remember to call them on that day and be prepared to take the payment.
In addition to payment plans, consider settlement plans. There are times when it’s better to accept what is being offered than get no money at all. You could also consider removing late fees and interest fees to make the debtor feel as if you’re doing something to help them.
Get Help with Your Debt Collection Process
Debt collection isn’t easy. Many business owners are uncomfortable with the process. To get results, hire Clients ARM to help your business with either first or third-party collections. We have a collections rate that’s better than 90%. So, let us help you get paid. The process is easy, and you can rest assured knowing that you’ve partnered with a debt collector who understands the law and who can help you get paid. To learn more about our debt collection services, schedule your free consultation.