Small business debt collection is a group activity. The business owner should establish that that the recovery of delinquent customer debt is a priority, and give staff resources needed to tget the job done. Key staff members must commit to a regular review of aging accounts receivables.

Process is important, and so is understand the factors that will encourage delinquent customers and pay your bill.

1. Leverage – If you have a product or service that customers want again, use your leverage. Old Fuel oil bills often get paid right after the first cold night. Pediatricians receive payment when parents need a physical form for camp or the start of a school year. If you have a some leverage, do not give it away. Whenever possible, do not continue to provide service to a customer who owes you money.
2. Discounts – Before you hire a collection agency, consider offering a discount to your customer. Offer a discount that is less than what you would pay your collection agency. You can also “roll in” new sales with the old bill, giving a small overall discount. Remember though to be very clear that your offer is only available for a limited time. Be specific about the date that offer will end. Explain consequences if payment is not made. You will be amazed at how many people will pay a bill when offered a 5 or 10% discount, and you will lower your overall cost of collection.
3. Ease of payment – Know your customers and make it easy for them to pay you. Some customers want to send you a check. Include an envelope with your bill. Other customers want to pay their bills online. Consider not only traditional credit cards, but newer methods like PayPal.
4. Communication – A phone call or collection letter can get you terrific results. Do not be afraid to call a customer to ask them for money.
5. Elevation – Each collection attempt should increase the urgency. Within your own organization, use senior management to reach out to delinquent customers. Let customers know that unpaid bills will be referred to your collection agency.

Small business debt collection is  not difficult. Use the tools you have available to you, and your business will benefit.