You don’t want your business to look like this.
Nobody likes those two words: debt collection. It brings to mind images of scarcity, unpleasant confrontations, and sleepless nights. However, when you run a business and extend credit to your customers, you have to deal with debt collection. How you manage it can influence cash flow, public perception, and customer loyalty, so it’s essential to take a refined approach.
When Debt Collection Causes Injury
You can sum up business in general as a series of engagements. Each time you call, email, or meet with a customer, there’s an interaction that takes place. When a customer buys something, the transaction is an engagement. The same proves true for debt collection.
If your customers respond negatively to your debt-collection strategy, you start to get the makings of a black eye. It’s not big and blue and swollen yet, but it can turn that way if your customers refuse to pay and your reputation takes a hit.
Believe it or not, every customer has a reason for not paying your invoice. Maybe one customer suffered a serious injury and is out of work, and perhaps another simply tossed out your bill as junk mail and doesn’t realize he’s 30 days behind. Since you don’t know the reason, you have to approach debt collection carefully.
A Salve for Poor Debt Collection
How do you prevent the unwanted black eye? You create a salve that protects your reputation as well as your corporate bank account.
First, establish an effective accounts receivable management program. If you don’t have clearly-defined billing policies and procedures, you can’t accurately track your cash flow and outstanding invoices. Furthermore, you can confuse your customer if you’re not clear about how you collect owed payments.
Second, decide how you’ll handle debt collection. A commercial collection agency can help you speed up the process and protect your reputation at the same time. We believe that debt collection shouldn’t be intimidating or humiliating for the customer; we’re dedicated to respectful and compassionate practices that politely influence consumers into paying their debts.
You can even find new ways to solve old problems, such as sending collection notices by email. Not only is it easier, but it also doesn’t require the postage of a mailed letter or the confrontation involved in a phone call.
Taking Control of Your Debt Collection Practices
You’re in business, but you’re probably not in the business of debt collecting. Your skills lie elsewhere, which is why you might have cash-flow issues and too many outstanding invoices.
A commercial collection agency can take that burden off your shoulders and allow you to do what you do best. Instead of floundering with debt, you can leave it in the hands of the professionals while you run your business.
Regardless of how you approach accounts receivable management, keep in mind that debt can quickly spiral out of control. The sooner you address your cash-flow problems, the brighter your business’s future becomes.
If you’re struggling to maintain positive cash flow, learn more about how to optimize your revenue. You’ll gain significant insight into cash-flow management that you can use to make your company more profitable.
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