With the Small Firms Association (SFA) recently reporting that getting paid on time remained the most significant problem facing small enterprises in the current economic climate, it is imperative that a strict debt collection regime is adhered to, to ensure business survival. The following tips can help in getting paid more promptly:
- Prepare for your call – have your customer’s information at hand so you can easily reference the history of the account, the amount owed, any notes from previous contact with the customer.
- Get the right attitude – adopt a professional, courteous attitude, never raise your voice and don’t threaten the customer. The call is a business call as part of the contract you fulfilled. Do not let it become personal.
- Know who to speak to – contact the person who you know deals with supplier payments, not just the person who answers your call. If you have no luck here, consider speaking to someone in management.
- Control the situation – do not allow yourself to be side tracked or pushed to the side with excuses. The point of the call is to collect debts owed – keep that the focus of the conversation.
- Be flexible – sometimes there are other reasons which may result in your debt not being paid. Try to identify if there are alternatives that work for you – e.g. setting up a new payment plan or agreeing a set date by which to be paid.
- Know the next step – Be precise in your dealings and ensure that you do not end the conversation without a commitment by the customer, whether it’s to pay the balance owed or to speak to their superiors and return your call by a specific time.
- Keep detailed notes – record the date and time of each phone call, the name of the person you spoke to and the outcome. Make sure to note if a follow up call or letter is necessary. This will allow you to make stronger credit decisions in future.
- Down payments/early payments – for larger projects, consider asking customers for a down payment as work begins. Weigh up the benefits also of introducing an incentive, e.g. a discount, for early payments.
- Time – for long overdue balances, consider the need to place the debt with a debt collection agency or taking legal action.
- Review the situation regularly – regular reviews will allow you to keep on top of overdue accounts. Also issue regular reminders of overdue balances in advance of the next payment date.
See Related Article: Tips for Maintaining Positive Cash Flow for your Business