6 tips for smoother business debt collection
Despite the fact that the main reason given for small companies failing is poor cash-flow bought on by slow payers, a correct strategy for collecting invoices is often not put in place. In this blog, Cobra Financial Solutions Ltd shed some light on how to achieve smoother business debt collection and highlight when is a good time to engage a professional debt collection agency to recover your outstanding debts on your behalf.
Time and time again, companies will instruct a particular member of their team to chase up and nudge a slow payer in between their ‘proper’, day to day job. Sometimes this is an office manager or a PA to a director. In the majority of cases, this is usually followed up by a telephone call from the boss themselves. In a business which sends out only 10 invoices a month, it may be possible to get away with such tactics, (just). Anymore and it flags a very poorly managed business and a lack of professional procedures in place. This is very wrong for many reasons. But why is this such a ‘no, no’ move?
Unfortunately, with all the will in the world and a bucket full of enthuasiasm, many office managers/ PA’s will not boast the business acumen to understand why a debtor is late paying their invoices. In the majority of cases, the main reason is missed as the important questions are not asked. One thing we will say is that a key element of collecting late payments is consistency. For first rate commercial debt collection, you need to act fast and so if credit control is not your domain, you should consider engaging the help of a professional debt collection agency such as Cobra Financial Solutions Ltd.
While it may feel right to have the boss call your clients to chase up late payments, it rarely is. It can actually be the beginning of losing the client while the choice of engaging a professional agency, can actually help maintain effective, working relationships across time.
With a wealth of experience in the debt collection industry, Cobra Financial Solutions Ltd share below our advice on how to achieve optimum performance with your commercial debt collection.
- Include your credit terms as part of the sales process. Ensure your sales people don’t shy away from it as it will help you in the long run.
- Contact your client before the debt is due and check that all is well with product and/or service. Assuming it is, confirm the expected payment day with your customer. This could help you to gauge how the client is communicating with you, and responding to your questions.
- Allocate a person to manage this process independently of any other. If you feel that you can’t afford it…outsource the job to a professional debt collection agency such as Cobra Financial Solutions. Operating across the whole of the United Kingdom, Cobra Financial Solutions have a fantastic success rate in recovering outstanding debts for our commercial clients. In 2015, we achieved an impressive 87% success rate and we’re proud to have set the benchmark so high as it sets a standard we always strive to beat.
- Incorporate steps into the collection process at specific times and don’t deviate from it. If at 60 days you have decided to send a pre-legal notice, then do it and don’t judge it on a case by case basis. However, if you feel you are not confident or competent enough to recover your outstanding debts, get in touch with a professional, persuasive and persistent debt collection agency as soon as possible.
- Finally, don’t get the boss to call, leave it to a collection professional such as Cobra Financial Solutions. If you engage with an agency such as us early enough, you could end up saving yourself a lot of money. So don’t delay! Get in touch with our debt collection team today to discuss your individual circumstances and requirements- we will be happy to help you.
- This could be the first, second, third, fourth and fifth option…..Outsource your credit control to a professional agency and focus on running your business without the hassle or stress of debt collection in-house. Leave it to the professionals and be confident in the fact Cobra Financial Solutions will recover the outstanding monies owed to you, swiftly, professionally and without distraction.