4 Steps to Resolving Customer Debt

Learn how to get what's yours

01/03/2019

4 Steps to Resolving Customer DebtYou are open for business. It’s all running smoothly until some patrons don’t pay their bills. This issue is not uncommon in service businesses or enterprises where you send invoices after work is complete. While we all understand that sometimes hindrances come up and people miss payments, it’s imperative that you do what you need to collect what is owed so you can cover your costs and serve other customers.
 

1. Plan ahead

Before you even contact a delinquent customer, have in-house conversations about how things will move forward. In a perfect situation, you would follow your standard policies for debt collection which include payment terms and payment plan options.  You should also review the complete details about this individual case. Dean Kaplan of The Kaplan Group, a commercial collection agency, stresses having copies on hand of all communication with this particular customer before you approach them about nonpayment.

Besides your own policies for debt collection, this is the time to look up the laws surrounding debt collection. There are several rules regarding how you can contact customers about outstanding debt. On the other hand, there are laws protecting you and your business’s rights as well. Make sure you familiarize yourself with them before you reach out and potentially make an error.
 

2. Keep track

Another key tip that Kaplan offers is to document absolutely everything in a debt collection process. This includes taking careful notes in each call, noting the times you tried and failed to talk to them and saving all written communication. This will be helpful if you need to take any legal steps later. On the customer service side, it will keep everyone in the loop when it comes to progress.
 

3. Breathe

While it’s easy to get upset when someone doesn’t pay you for your team’s hard work, it’s key to stay calm. Larry Alton of Small Business Trends points out that your demeanor can easily set the tone of the conversation. If you get mad, the customer might become angry as well and significantly slow down any progress. Consider smiling on the phone to put that positivity into your voice, and try not to jump to accusations in conversation. Even though they haven’t paid their bill, they’re still your customer. If you get emotional and lash out, people could hear about it and decide not to do business with you down the road.
 

4. Go to the experts

Sometimes it is impossible to get a customer who owes you money on the phone, or perhaps you’re not sure that you can handle the situation with the correct demeanor. In those cases, it might be time to call in a professional debt collection agency. While this means that you will lose some of the money they recover to fees, it might be worth it for large costs you need at least partially covered. These experts know the world of debt collection and how to navigate it, and you can go back to managing the day-to-day operations of your company.

Debt collection is never fun, but it will likely come up as you do business. With the proper preparation, you can get what’s owed to you.

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