Don’t make these mistakes when collecting debts

If you are a small business owner, following up on late payments is probably one of your least favorite tasks. But collecting debts does not have to be so hard. All you need to know is what not to do and when to hire an experienced accounts receivable management firm. These firms can get your customers to pay while preserving your relationship with them. 

Are you making these common mistakes when collecting debts?

You wait too long to ask for payment.

One of the most common mistakes small business owners make is that they wait too long to contact a non-paying customer. Unfortunately, once the invoice is 60 days past due, the chances of collecting it go down. The customer may simply forget by then. Some may even dispute the bill. 

An early reminder can keep the invoice fresh in your customer’s mind. 

You take it personally. 

It can be hard not to take it personally when a customer does not pay you. But you don’t want emotions clouding your judgment. Getting angry or defensive can push your customers away and make the situation even harder to resolve. Of course, ignoring the situation will not help you either. 

Debt collection should always be professional and respectful. To keep the situation neutral, many small business owners hand the responsibility over to an accounts receivable management firm. A third party can speak to your customers firmly but politely. This is how they protect both your money and your business relationships.

You don’t have all the paperwork.

Missing paperwork can make it hard to collect overdue payments. If you can’t find the original invoice or the customer’s payment terms are somewhere in an old email thread, you are only left with guessing. So you must keep copies of contracts, statements, emails, texts, even notes from phone calls in one place.  

This can be a lot to do on your own, which is why many businesses work with an accounts receivable management firm. A professional firm will track and document every call and payment. So when it is time to follow up, they have everything they need.

You have not followed the law.

Did you know that there are laws about how and when you can contact customers? Calling too late or even using the wrong language in a message could get your business in trouble. It is very easy to cross those lines without meaning to. 

So how do you stay compliant? Hire professional small business debt collection services.  

You handle every late customer the same way.

Not every overdue payment has the same reason. Some customers genuinely forgot to pay, while others are waiting for their own clients to pay them first. This is why treating all of your customers the same way rarely works. 

For this reason, companies like Ca$h in USA customize their tone and messaging to each situation. They can be firm when necessary and empathetic when it helps.

Are you looking for a company to handle your collections?

Avoid these common mistakes, and you improve your chances of getting paid on time. And if you are already spending too much of your time following up on late payments, it is best to call a professional accounts receivable management firm. Contact Ca$h in USA today to learn how we can help you collect your payments more efficiently.