Revenue is important to any business, but it’s not just about the profits. It’s also about successfully collecting money owed to you by debtors. Otherwise, you’ll slowly start to see your profits turn into losses. It’s not always easy, but with some planning and organization, you can start to collect your company’s outstanding balances more efficiently and without any headaches for your accounts receivable team.
Here are some tips to get you on the path to debt collection success:
Track your loans – Document who you lent to, the date of the loan, and the expected payment due date. Also make a special note for overdue payments and how they will be handled. If late fees are not outlined on the initial invoice you may find yourself fighting with your clients when you try to add them on to the amount due.
Document customer payment history – Not all customers pay on time. Knowing when a payment can realistically be expected from any given debtor can ease the collection process down the road. Tracking when payments tend to come in from customers will allow you spot trends and allow you to appropriately develop a collection plan. If someone is consistently a month late with payment a late fee after 30 days might get them moving with a little more pep in their step.
Acknowledge your debtors when paid – Especially for on-time payments, a ‘thank you’ can go a long way in ensuring you’ll continue to receive prompt payments. This might seem a little silly, but remember your clients are paying you with their hard earned money. Sometimes it’s nice to see that it’s appreciated.
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