If your debtors are giving a hard time, then you are not alone in this difficult situation. You definitely want to keep your business running, and the only way you can do that is by having a steady flow of clients. However, if they are not paying, you will not be making any profits. Read the debt collection tips provided below to help you deal with such problems.
Ensure that you invoice professionally. The document should have information regarding the product, the dates and all costs. Ensure that everything has been included on the dispatch note before anything is done. This is because your debts will definitely be paid contingent to your competence and organization.
If the stated date has passed and you have not received any payment or communication, then send a statement. Ensure that you state the amount and the date on which you expected the payment. This should get you at least a response from the debtor, but if it does not, then send them a reminder letter. Be polite and just remind them of your concerns.
Flexibility is important when dealing with debtors. This is because every client will have circumstances that differ from the other. Therefore, for you to recover the loan fully you will have to adjust yourself with the current financial situation of your clientele. However, renegotiation of the payment schedule should be done when you are sure that the customer is reliable.
Be precise. Most businesses that are affected by delayed payments allow customers to control things. This should not be the case, ensure that you get a commitment letter from the client on the exact amount they are willing to pay on given dates. This will ensure that there is no misunderstanding between you and the debtor.
Contact the client. Sometimes, you may have sent a reminder letter without getting any feedback. In such a case, make an effort to call the customer. Ask what could be happening and if they got your letters. Discuss any new arrangements they may be comfortable with. Reach an agreement before you close the conversation.
Send a second reminder letter. Before you take any further actions, contact the debtor and talk to them about the actions you would take if they do not respond. You may even warn them that you will refuse them goods on credit in future due to their behavior.
If you do not get any response, then you should take legal action against the defaulter. This is the last resort especially if it involves a lot of cash. However, ensure that you consult with your company lawyer before filing any lawsuit.
If things get worse, you can also opt for Small Claims Court. If you have a small amount of debt, then this could be the best option. However, the court may only listen to your case if you have proof that all attempts on your part to reach an agreement have been futile.
Running a money lending business can be quite hectic. However, you have to acquire some credit management skills. Furthermore, you have to know the credit history of all your customers to avoid losing your money. However, you have to arm yourself with these debt collection tips, as they can be helpful.
Ensure that you invoice professionally. The document should have information regarding the product, the dates and all costs. Ensure that everything has been included on the dispatch note before anything is done. This is because your debts will definitely be paid contingent to your competence and organization.
If the stated date has passed and you have not received any payment or communication, then send a statement. Ensure that you state the amount and the date on which you expected the payment. This should get you at least a response from the debtor, but if it does not, then send them a reminder letter. Be polite and just remind them of your concerns.
Flexibility is important when dealing with debtors. This is because every client will have circumstances that differ from the other. Therefore, for you to recover the loan fully you will have to adjust yourself with the current financial situation of your clientele. However, renegotiation of the payment schedule should be done when you are sure that the customer is reliable.
Be precise. Most businesses that are affected by delayed payments allow customers to control things. This should not be the case, ensure that you get a commitment letter from the client on the exact amount they are willing to pay on given dates. This will ensure that there is no misunderstanding between you and the debtor.
Contact the client. Sometimes, you may have sent a reminder letter without getting any feedback. In such a case, make an effort to call the customer. Ask what could be happening and if they got your letters. Discuss any new arrangements they may be comfortable with. Reach an agreement before you close the conversation.
Send a second reminder letter. Before you take any further actions, contact the debtor and talk to them about the actions you would take if they do not respond. You may even warn them that you will refuse them goods on credit in future due to their behavior.
If you do not get any response, then you should take legal action against the defaulter. This is the last resort especially if it involves a lot of cash. However, ensure that you consult with your company lawyer before filing any lawsuit.
If things get worse, you can also opt for Small Claims Court. If you have a small amount of debt, then this could be the best option. However, the court may only listen to your case if you have proof that all attempts on your part to reach an agreement have been futile.
Running a money lending business can be quite hectic. However, you have to acquire some credit management skills. Furthermore, you have to know the credit history of all your customers to avoid losing your money. However, you have to arm yourself with these debt collection tips, as they can be helpful.
No comments:
Post a Comment