Debt Collection Tips for Small Business
Collecting unpaid debts can be a challenge for small businesses. These debt collection tips for small business owners can help you recover more of what you’re owed.
Five Core Tips
- Have a clear and concise invoicing process. Your invoices should be easy to understand and include all necessary information: the amount due, the due date, and your contact information.
- Follow up promptly. If an invoice isn’t paid on time, follow up with the customer immediately. The sooner you follow up, the more likely you are to collect the debt.
- Be professional and polite. Even with a difficult customer, stay professional and polite. You want to maintain the relationship, even if they’re not paying right now.
- Be persistent. Don’t give up if a customer doesn’t pay right away. Keep following up until you collect the debt.
- Consider hiring a collection agency. If you’ve tried everything else and still can’t collect, a collection agency can take it from here.
Beyond these core steps, a few more habits round out a solid approach to small business debt collection.
A Few More Tips to Keep In Mind
- Keep good records. Document every interaction with the debtor, including phone calls, letters, and emails. Good records help if you need to take legal action.
- Be patient. Collecting a debt can take time. Don’t get discouraged if you don’t see results right away.
- Be prepared to negotiate. In some cases, you may be able to settle the debt for less than the full amount rather than losing it entirely.
Collecting unpaid debts can be a challenge for small businesses. However, by following these debt collection tips for small business owners — and staying compliant with the Fair Debt Collection Practices Act (FDCPA) — you can increase your chances of recovering the money you’re owed.
New World Collections has been helping small businesses recover past-due debts since 1997. Contact us to learn how we can help.
