SMALL BUSINESS DEBT COLLECTION STRATEGIES
Set Established Payment Guidelines. To avoid problems in the first place, establish ground rules for how payment should be made and stick to them. Clearly spell out your terms of sale and payment options on your order form or brochure.
Get it in Writing. Get the customer to sign an agreement/ contract or memo of understanding as to the payment terms, and explain these also to the client.
If the Project or Supply is ongoing charge monthly instead ot at the end of the Supply Period. If payment is not received within the agreed term, do no more work for them until payment is made.
Send a series of Reminders. However if written reminders don,t work call personally and ask for the payment.
Evaluate the Situation. Present Options. If the client is overdue by a small margin (say a week) give them some time. But if the days turn into weeks and months, start with a friendly phone call to follow up and let them know the payment is overdue. Try and get a date for payment and follow up if they dont meet that date.
Be Persistent in trying to Collect
Send a Registered Letter. This has the effect of getting your point across without having to confront them verbally or in person.
After all else fails, let them know that you are either turning over the matter to either your Lawyer or Collection Agency, or taking them to the Small Claims Court.
Be Willing to take Legal Action.
Know when to Quit. Try to collect if you have the time and ambition to do so, but if not, just write it off to experience. Sometimes the money is not worth the aggravation.
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