Too often businesses leave collecting debts at the bottom of the pile. Why? Often there is anxiety and worry around the process, or lack of trust in collection agencies. Sometimes lack of time and understanding of the process.
But a business’ debt collection process should be an easy, no brainer business-as-usual process. Just like your other well-established business practices.
At Debtor Daddy, we’re breaking down these barriers, so debt collection is efficient, unemotional and more likely to see results.
WHY: Let’s start with why you should collect your debts…
Number one: CASH FLOW. In business, we (should) all know how important cash flow is. Without it, we simply can’t sustain being in business. A good payment follow up and debt collection process will ensure you have the cash to be able to run your business.
Be part of the answer: Odds are, if you’re having a hard time getting payment from a debtor, others are having (or will have) trouble too. It’s your responsibility to the business community to help rid bad payers.
WHEN: Don’t leave it too late
The sooner you follow up, the higher your success rate will be. Everyday that your debtor doesn’t pay an overdue invoice, the more unlikely you are to get paid at all. As time goes on, your debtor’s mindset changes around what they owe you, and if enough time passes, they’ll often eventually feel that they don’t owe you anything at all.
And keep in mind – if you are giving your customers 30-day terms to pay, then by the time you reach the 90-day mark, you’ve been out of pocket for FOUR MONTHS! And even more shockingly, most businesses are leaving kicking in the debt collection process until 180 day.