Collecting business debts can be a difficult task for people who focus their entire schedule on collections, which makes it a nearly impossible task for SMBs and solopreneurs.
If you are the head of a small business or operating as a solopreneur, you have a large number of tasks on your plate at any given time. That means that you just don’t have the necessary time to devote to chasing the money that is owed to you.
For those business leaders who are tasked with handling collections, you can never have enough systems in place to improve your process. These eight tips and tricks will help you improve that process.
Have a Collection Strategy in Place
The first thing that you need to know about commercial debt collection for SMBs and solopreneurs is that the people who get the best results are the ones who have a plan in place before they actually need one.
That means taking some time as soon as you possibly can to determine what you will use as a time frame for delinquency, what penalties you will charge, how you intend to contact delinquent accounts, and what you plan to do when they don’t respond favorably.
Stay Organized
Keeping everything organized will benefit just about any aspect of your business, but it is essential when it comes to tracking the money that is owed to you. In many cases, you won’t even know what clients you need to be collecting from if you don’t have their information in the right places.
Document Everything
Once you see an account fall into delinquent status, you will need access to just about every transaction or encounter you had with that customer. This is where having detailed documents can be extremely helpful.
You also need to continue documenting everything once you start making collection attempts. Save copies of collection letters and keep detailed notes of any phone conversations. All of this information could be helpful down the road.
Turn Up the Charm Level
You will always get better results by being nice to the customer you are contacting, so make sure that you turn up the charm level on your voice before making collection calls…even if you have to fake it.
Never Let It Get Personal
Because small business owners and solopreneurs have a more intimate connection to their companies, they often find themselves taking things personally when clients don’t stick to the agreed upon payment schedule. But in order to get the best results, you need to remove that personal aspect from the situation.
Be Willing to Negotiate
In many cases, you are also going to have to be willing to negotiate a settlement for less than the full amount owed. This is never ideal, but it is often the best possible outcome, and you won’t be able to see that if you let things get too personal.
Listen for Solutions
While you are working on a collection, make sure that you are paying careful attention to what the consumer is actually saying. Many times, they will offer up clues that can help you identify their true motivations, which you can use to propose a solution that works for everyone.
Know When to Ask for Help
There are going to be cases where you just can’t get anywhere with a delinquent account. It is important that you are able to identify those situations quickly so that you can stop wasting your time on them.
It can also help to have a relationship with a reputable debt collection agency established so that you can pass along the accounts you aren’t making any progress on.
As a small business owner or solopreneur, you already have too much on your plate. Handling debt collection is something that you likely just don’t have the time for. But by following these tips and tricks, you can quickly work through your process without wasting any of that precious time.
