Five Tips to Improve Small Business Debt Collection
Want to improve small business debt collection at your company? Start with these five tips.
Five Core Tips
- Have a clear and concise debt collection policy. Outline your procedures. Include the time you’ll give debtors to pay, the methods you’ll use, and the consequences for non-payment.
- Be proactive in collecting debts. Don’t wait for debtors to contact you. Reach out as soon as the debt is due. This shows you’re serious and won’t give up easily.
- Be professional and respectful when collecting debts. Remember you’re dealing with people who may feel stressed or embarrassed. Stay polite and understanding, and avoid harsh language.
- Use a variety of collection methods. Sending letters, making phone calls, and using a collection agency all increase your chances of success.
- Document everything. Keep detailed records of every contact, method used, and debtor response. This documentation helps if you need to take legal action later.
Following these tips can help you improve your small business debt collection process and recover more of what you’re owed.
A Few More Tips That Help
- Be clear about the consequences of non-payment. Let debtors know you’ll take further action, such as sending the debt to collections or filing a lawsuit.
- Be patient, but persistent. Collecting a debt takes time. Keep contacting the debtor so they know you’re still pursuing the money.
- Work with the debtor to find a solution. If they can’t pay in full, consider a payment plan they can actually afford.
- Know your rights. As a creditor, the Fair Debt Collection Practices Act (FDCPA) and other laws protect certain rights. Understand them so you can protect yourself.
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