The Secret Guide to Small Business Debt Collection
Are you struggling with collecting on debts owed to you by small businesses? You’re in luck! Today, Client’s Arm is going to share some secrets with you to make small business debt collection easy and stress free. Ready to get started?
Have a Plan
You need a small business debt collection plan, and you need one before you even begin to legitimately worry that you’re going to have a small business that defaults on their account. Part of solving a problem in an efficient manner is to think about it before it’s even a problem. This proactive approach will stop you from being panicked in the future.
Your plan should detail your approach to small business debt collection. It needs to list whether you will keep the collection process in-house or if you plan to outsource. If you plan to keep it in-house, determine if you will start the collections process and later move it to a professional. Often, many companies perform soft first party collections from their own location (although it is something that you can outsource to focus on your business).
It should contain a detailed plan. How often will the account be called on? Will you accept settlements? If so, you need to define the parameters. In short, you need to have a set of policies and procedures in place to determine how you will handle your small business debt collection process from start to finish.
Small business collections isn’t all that different from consumer collections in the sense that most people who decide to start a business don’t do it with the intention of defaulting. So, for this guide understand that we are discussing the business owners who owe money and are legitimately struggling.
When you call to collect, put yourself in their shoes. Although they owe you money, keep in mind that the people who run the business deserve compassion. Do not call and yell and scream. Do not call with idle threats. Save threats of legal action unless you really do plan to go that day and file a claim with the court.
Instead, try to find out what you can do to help make the situation better. Can you work with the small business in anyway? If so, you’re doing more than working toward resolution toward the unpaid debt. You’re solidifying a long-term client if they are able to recover and get back on track. Even if they are unable to buy from you in the future, they will refer you to others because you acted in a reasonable manner.
You really will be surprised at just how much you can accomplish by showing a little compassion.
Keep Tracks of Local Laws
Small business collections may have different laws in your area than consumer collections. Make sure that you know and understand the laws in your area or in the area in which your client’s business operates.
Get Expert Help
There may come a time in your small business collections process that you decide that you need expert help. You can also ask our expert staff about best practices for the process and get help creating a customized plan. You can get a free process review to get started on your small business debt collection plan – just click here to get started.