Avoid These Common Debt Collection Mistakes in Your Business
Debt collection can be the bane of your business – but the thing is, it doesn’t have to be.
When you properly manage your finances and are aware of your business’s cash flow, debt collection shouldn’t be a problem.
Gone are the days when debt collectors would bombard you with calls and visits. They’re not some burly men who want to hurt you if you don’t pay up; they are professionals who know what is allowed within local laws about debt collection.
To avoid being in debt, or having client debt in your business, follow these tried and tested tips from debt collectors Adelaide:
Not Having a Terms and Conditions in Place
This is probably one of the most common yet avoidable mistakes you can make when dealing with clients.
Having a contract protects both yourself and the other party. It lays down details of the agreement such as when payments will be made, what kind of service or product is expected of the business, and such.
Having signed a terms and conditions agreement also means that this document is legally binding – if push comes to shove and the deal doesn’t go as expected, you can go to court and sue them.
Not Doing Due Diligence
When a deal is on the table and you feel like it’s The One, it can be very tempting to go straight in without knowing all the details. And yes, this includes who you’ll be making a deal with.
If you’re not doing due diligence, you might find yourself in a pickle.
Due diligence is simply the act of doing a background check. This is legal and part of the correct process of striking a deal with a new client. Search and study their credit report and see if they have an outstanding balance of loans. You can also check how diligently they’ve been paying off debt. Knowing their credit history comes with a small fee but it’s worth every penny.
No Debt Collection Specialist or Process in Place
How organized are you in keeping track of accounts receivables? Do you have a designated person who regularly checks on such things? How systematic is your process of debt collection?
It might be best to hire one if you haven’t yet. Not having a debt collection process in your small business can put a dent in your cash flow and with the many things that keep you busy and on your toes with other aspects of running your business, you’re bound to forget one thing or another.
You Have no Idea When to Call for Professional Help
Some small business owners wait until the debt is too big to handle to call in a professional debt collection service. To be honest, enlisting the help of a debt collector early on can be one of the wisest things you can do for your business.
You can leave it up to the professionals to handle clients who have neglected their end of the bargain. Most of these debt collectors don’t ask for any upfront fees; they only ask for payment once they have successfully collected the debt. This is another reason why small business owners hesitate to call the professionals: they think they will be charged fees right away. In truth, reputable debt collection services don’t do this.
Keep in mind that if you chase after clients on your own, your attention isn’t on other important matters anymore. With a professional debt collector, you have time and energy to do the things that need to be done.
Call a professional debt collector today and see the difference.