7 Debt Collection Mistakes Made by Small Businesses

Do you own a small business?

Do you have debt to collect and your current methods aren’t working?

You aren’t the only one. Plenty of business owners know this struggle and go through it daily.

Of course, there are things that you can go through in order to make the process easier on yourself.

Below, you can read about seven debt collection mistakes made by small business owners so that you can avoid them altogether.

No Follow-Up System

If you’re a small business owner, you’re probably a very busy person. You have to manage so much, and you have a lot of decisions on your plate. Because of this, you might have let some customers go a long time without paying in the past.

When you get in the habit of this, though, it can become easy for your customers to take advantage of you. In order to avoid this, you should have a system in place that prioritizes debt collection.

Nothing in Writing

You should always, always, always have a contract in place. This will protect your client, but it will also protect you. A contract will usually have the details of your business deal, and in it you need to describe the consequences of not paying. Have you and your client sign the contract. This will become a legally-binding contract. If your customer is a regular, make sure that you update his or her information every year. This will only make it easier for you to collect the debts you’re owed.

A Collection Agency

Don’t wait too long to hire a debt collection agency. These people will be able to take the burden off of your shoulders. They’re more experienced and you can go on with your daily life until you get your money back.

Hiring the WRONG Agency

Yes, it’s absolutely necessary to hire a collection agency. You shouldn’t go with the cheapest agency out there. That’s because they might not work that hard to get your money if they aren’t getting paid much in return. Find someone who has a track record of efficiency and cost.

Not Updating Information

By having the right information on-hand, you can contact the people who owe you money all that more easily. This way, you might not even need to hire a debt collection agency.

Harassment

Although it’s important that you’re paid, you have to be careful about it. You can’t go around harassing people. When it’s been a long time that you haven’t been paid and nothing seems to be working, you should call the authorities and get yourself a lawyer.

Play it Smart

When you’re trying to collect debt, make sure you’re playing it smart at the same time. If you call those who owe you at an unreasonable hour, they most likely won’t answer you. Because of this, you should call them at hours when they’re more likely to answer your phone call. Try using someone else’s phone so that they don’t know it’s you.

Conclusion

Does someone owe you money?

Are you wondering how to get your money back without getting yourself in trouble?

There’s a few major mistakes that most small businesses make when they’re trying to collect debt.

Here are just a few of the mistakes that you can make when you’re trying to get your money back: harassing those who owe you, not updating customer information, calling at the wrong hours, hiring the wrong collection agency, and even forgetting to call a collection agency at all.

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