Debt recovery isn’t always easy – that’s why specialist debt collection firms like CPA exist in the first place – but there are a few things you can do that will help you get your money back, whether you chase for payment yourself, or appoint a debt recovery company to do it for you.
Here are our top five debt recovery tips, in no particular order:
1. It’s good to talk
You’re more likely to get paid if you keep open lines of communication with your client, civil to begin with, and gradually more ‘threatening’ of court action, penalty fees and so on if they do not pay.
Keep it in perspective, so your client does not feel unfairly harassed from the outset, but be prepared to contact them more and more frequently if you think ‘pester power’ will work (it often does).
You should also make sure you have as many methods of contact as possible – so make a list in one place of the client’s full name, address, email address, telephone number, fax number and so on, just in case they stop responding to one form of contact.
2. Get it right
If a dispute arises, you need to know you’re in the right – and that means the minor details on any paperwork, too.
When you issue an invoice, double check the amounts you are invoicing for, the description of the work done, and the name and details of the recipient, so there can be no claims later that the amount is not owed at all.
3. Be prompt
If you want prompt payment, you have to act promptly too, so be sure to invoice regularly either on completion of each order, or on the same date each month.
Regular customers will come to anticipate your invoice, which should encourage them to pay it sooner, while it keeps things nice and tidy in-house if everything goes out on the same day.
4. Reduce risk
They say prevention is better than cure, and this tip is all about making sure you don’t reach the stage of having outstanding debts to recover.
Run background credit checks on new clients, and put sensible credit limits on new accounts until you know you can trust them to pay on time.
You can even gradually increase the credit limit on long-term client accounts – which in itself could be seen by some as an incentive to pay on time and keep renewing their order.
5. Stay strong
If your client really doesn’t want to pay up, it’s going to be a bit of a bumpy ride getting your money back, and at times you will probably feel frustrated and even angry that they won’t cooperate.
This doesn’t mean you should give up – chasing debt collection is a business decision, so set your personal feelings to one side, and make sure you are doing everything you can to put the law into action and even to go to court if you have to, in order to get what you are owed.