Small business debt collection is not easy. However, many business owners make it more difficult than it needs to be.
Here are the top 5 mistakes small business owners make with respect to bad debt collection:
Lack of focus on aging of receivables, and no – Small business owners are busy. They must manage the day to day operations of their business and also handle new business sales and customer service. It is very easy for a growing small business to fall in the trap of letting delinquent customers go too long without paying, simply because they are too busy. A healthy small business puts their credit and collections procedures front and center with the same priority as sales and customer service. We advise small businesses to look at , and do the same.
Not gathering enough or not updating customer information – If you are going to give a customer credit, you have the right to ask for information. You should update the information of repeat customers annually, at a minimum. Having good current customer information will make it easier to recover bad debt.
Waiting too long to hire a collection agency – In house collection efforts should be short term, around 90 days, and then it is . The cost of collection agency will certainly be less than having to write off the entire debt.
Hiring the wrong collection partner – Some companies hire a collection agency with the lowest , only to find out that they really don’t have a partner who is going to work hard to get them paid. Some companies . Take time and research and pick the collection partner that is right for your business.