Small Business Debt Collection: It is All About Communication

Posted by Marilyn Miller on November 09, 2020  /   Posted in Uncategorized

Small business debt collection cannot be accomplished without communication. Whether you are collecting the debt in-house or hire a collection agency, what you say and when you say it makes all the difference.


Now, communication should start from the very beginning of a relationship with a contract or at very least some documentation of the terms of the delivery of your product or service. Today though, we will focus on the role of communication in the recovery of past due balances.

The novel Code Name: William Tell by Colonel Don Wilson describes a fictional president who comes to a peaceful solution to a national crisis by letting his mind expand to consider all possibilities. His character muses, “there is no last word in diplomacy”.

Diplomacy – in the form of clear communication- is the essence of collection.  Not threatening, but communication, talking, diplomacy.  Your problem is that the individual or business is not paying, and probably not talking either.  The initial step is not to threaten, but to open a hailing frequency, find out what the problem is.

With commercial small business debt collection you would be surprised how many times the reason for nonpayment is simply  that the invoices were not in the right department.  Are you in contact with the person who approves and pays bills? If not, get to that person, and getting paid is much easier.


With consumer debt collection, lack of communication is also often a factor in why bills do not get paid. Are your invoices clear and do they detail all your payments and charges. With medical and dental debt collection, it is often a matter of helping patients understand how their insurance policy works.

The most important aspect of credit management is communicating with the people who owe you money.  An initial phone call should follow an invoice after a completed job.  The communication link between you and the account starts on a positive note from the outset.  You can update contact information. The call will not only help with payment but also address any issues that could be obstacles to payment. For example, a client of ours, a well water treatment contractor, recently phoned a customer about a past due bill for a water sampling. The customer explained that she had not received the results of the test (an oversight by company) and when provided with the results, instantly provided payment.

Continue conversations with your customers, making sure your invoices have the terms clearly printed on them, and advise your customers how and when you expect to get paid.  Remember, a customer still wants something from you.  They want to use the credit you extend because it is good for their finances.  You as the creditor then assume the responsibility of its management.  Credit will not manage itself.

People respond to people.   There is a reason they aren’t paying.  The only way to find out is to pick up the phone and ask.

There are times when you cannot communicate with someone, because they stop responding to you, and you will need to outsource to your collection agency. But the more you make your small business debt collection about communication, the less likely it will be that you have to pay your collection agency to recover for you.

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