Debt and Payment Collection Advice for Your Small Business

When you’re a small business owner, every penny counts. And when you have customers or clients who have failed to get their payment to you on time, it’s enough to make any business owner a little anxious. You have bills to pay and want to progress within your industry, but at the same time, you’re worried about alienating the small number of clients you already have.

Debt collection meeting

It’s a difficult situation to be in. But unfortunately, one that’s incredibly common!

It’s important to remember that there are often two kinds of debtors. Some clients may have simply forgotten to pay either through poor organisation or by error. Alternatively, others have no intention of paying whatsoever. Thankfully, most business debts fall into the first category which means collecting any outstanding payment shouldn’t be too painful (for either of you).

Here we’ll explore debt and payment collection advice for your small business.

Don’t be afraid to speak to a lawyer

Regardless of the size of the outstanding debt, if despite your best attempts you’re still not getting anywhere, then don’t be afraid to consider a formal commercial debt recovery process. Business debt recovery lawyers work hard to ensure your business remains profitable and will assist you in recovering the debts prudently, yet efficiently. If you’re concerned your current approach isn’t working, then speak with a business litigation lawyer as soon as possible.

Reach out and make contact

It’s enough to make you head for the hills, but reaching out to the client in question and raising the subject of the outstanding payment could be easier than you think. Don’t just pick up the phone and demand to know where your money is, structure the call carefully and ask them if they’re satisfied with your services/products. Then you can politely mention how you were concerned about the lack of payment and thought you should check-in.

If they’ve genuinely forgotten, then they’ll probably make the payment straight away. However, if there is an issue with your products/services then you’ll be able to rectify the issue for them and build a stronger customer relationship.

Make sure your payment and invoice structure is clear

If you’re having reoccurring issues with late payments, then it may be worth revisiting your invoice and payment structure. If the process isn’t clear for your clients or it’s littered with irregularities and it’s difficult to understand, then you may be plagued with these kinds of issues until you resolve them.

Ensure your invoices are easy to read and understand and have all the relevant information on them. Including ways to pay, bank details, VAT numbers and your payment terms. Your payment terms should detail when you should be paid by. Ensure your contact details are easy to find and encourage your clients to reach out to you with any issues.

And finally, keep records of everything

Should things take a turn for the worst, having the situation well documented can certainly help your case, should it go to court. Recording phone calls, having copies of emails and letters sent and any other contact or communication you’ve had with the customer could prove helpful for your case and getting your money.

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