10 Important Tips to Help Your Business Collect Payments
Categorised in: Our Blog
Whether you’re a self-employed individual, a small business, or a large company, you deserve to be paid for your products and services. With over 23 years of experience in the debt collection business, at Summit A*R we understand that you may run into a delinquent customer for a variety of reasons.
Your customer may be facing a short or long-term financial crunch, an illness, or something else. In rare instances, they may simply be reluctant to pay despite being financially capable to do so. Regardless, it’s important to strategize so you can minimize your chances of facing delinquent accounts. Moreover, it’s important to have debt recovery strategies in place.
Start by calculating your average collection period to get a better understanding of your cash flow position. At Summit A*R, we offer our clients multiple services to help them in their revenue recovery needs. You can use the average collection period calculator on our platform at any time of the day to gauge the effectiveness of your credit and collection policies.
Next, follow these tips to improve your chances of debt recovery:
1. Collect Your Customer’s Information Before Doing Business
If your customer refuses to pay, then their data is your first line of defense. If possible, ask for their social security information, driver’s license, place of employment, address, phone number, and email. What’s more, ask for references. They can be your first point of contact should your client disappear.
2. Cross-Check Their Information
In the digital age, it’s easy to double-check your customer’s information. Don’t be alarmed if a little information doesn’t add up. Some errors are normal. However, too many inconsistencies can be a red flag.
3. Check Their Reputation
Access information from credit reference agencies, debt advisors and others to get an accurate view of the transaction. Speak to other businesses. If your customer already has outstanding debts with other businesses that they’re not paying, then reconsider working with them.
4. Insist on a Contract
Have them sign a professionally written contract that clearly outlines the terms of the deal, including payment obligations. This can help keep you and your customer on the same page.
5. Charge Interest for Late Payments
You’ll be surprised by how many people pay on time to avoid late fees. Charge interest to incentivize timely payments. You can also use this as a bargaining chip when recovering revenue. Should your delinquent customer refuse to pay, you can offer to waive the penalties.
Alternatively, you can offer incentives for early payments. Many customers are willing to pay early for lower rates or extra products and services.
6. Remain Professional
Try not to react under pressure. Harassing or threatening your customer will prove to be counterproductive. Not only could it harm your reputation, but it could make the debt harder to recover. At Summit A*R, we’ve noticed that debtors respond better when treated with respect.
Most debtors are good people who want to clear their dues. Many will do so when presented with manageable options and treated with dignity. That’s why we have a “P.H.D. Philosophy” (Preserve Human Dignity). Our ethics are good for our morale and help us with our recovery rates.
7. Be Proactive but Remain Shrewd
We can assure you that debt grows harder to recover with time. That’s why you need to remain on top of the situation with demand letters, phone calls, and emails. Contact your client as soon as 30 days have passed without payment. This is especially important if they have other creditors seeking to recover revenue from them. You don’t want to be beaten to the punch.
At the same time, you need to evaluate the situation carefully. If you want to maintain a relationship with a loyal customer that’s facing adverse economic conditions temporarily, then it could be in your best interest to extend the payment deadline.
8. Offer Several Payment Options
This may seem obvious but have as many payment options as possible for your customer. Accept payments from credit cards, debit cards, bank transfers, and checks. Digital payment solutions are usually easier for customers and give them less time to think twice about not paying.
9. Partner with a Collection Agency
Use the services of a debt collection agency to save yourself the stress of chasing delinquent accounts. At Summit A*R, we have several options to help you recover your revenue. Here are a few reasons why we are the best collection agency for you to partner with:
- We take a friendly, respectful, yet stern approach to debt collection. Our ethical policies help you preserve your reputation in the business community.
- Our methods are highly effective. We boast a recovery rate that’s twice the national average.
- We only get paid when we recover your revenue. Our percentages are reasonable, and we don’t demand a minimum number of accounts.
- We serve businesses of all sizes. No business is too big or too small to work with Summit A*R.
- Our platform offers many services. We help you stay on top of your account(s) with friendly support and timely information.
- We have experience working in multiple industries and understand their nuances. From medical collections to commercial tenant collections, our strategies are tailormade to suit each situation.
- Our compliance record is impeccable, and we have an A+ rating from the Better Business Bureau (BBB).
Just like it’s important to partner with an ethical collection agency, it’s equally important to avoid the minority of debt collectors that don’t play by the rules. You should learn about fair debt collection practices act (FDCPA), a federal law that puts limitations on what debt collectors can do. By partnering with an agency that’s mindful of the FDCPA, you can recover your revenue while preserving your reputation and limiting your risk.
10. Use a Third-Party to Manage Payments
Consider hiring a professional third-party to manage your payments. This will free up your resources and allow you to concentrate on improving your profitability. Professional payment collection businesses are sometimes more effective at collecting payments.
At Summit A*R, we also offer pre-collection services in certain industries. You can outsource your A/R cycle out to us to minimize lost revenue. We will represent you professionally and without complaints.
These ten tips can help you improve your payment collection solutions. For further inquiries, get in touch with Summit A*R. You can send us an email, give us a call, or request a callback. Our experienced and licensed professionals can help turn your AR cycle around.