Outstanding B2B debts are the bane of many businesses across the United Kingdom regardless of whether they are small, medium or large. Fortunately, you can avoid issues with debt recovery by avoiding these 7 horrible (and very common) mistakes.
1. Not having a credit policy
It is essential that you have a robust and clear credit policy in place before you provide goods or services and receive payment for them. A credit policy provides uniformity of terms across all your clients. It also means that you are complying with customer protection regulations too.
2. Not being flexible with your credit terms
Although you must have a good credit policy in place, you must also be open to a degree of flexibility. As you develop a rapport with your customers over time, you will begin to profile those who are high-risk.
On the flipside, you will also recognise those who are low-risk. We advise that you regularly review your customer profiles, which will enable you to tailor your credit terms accordingly. By doing so, you’ll potentially avoid the need to take debt recovery action in the future.
3. Not following up invoices
In order for your credit policy to remain robust and effective, you must invest time in training your staff in a formal procedure. This will then be used to follow up any unpaid or late invoices, ensuring that they stick to this procedure. It is important to decide for how long you will continue to contact your debtors before commencing formal recovery proceedings.
Also, be sure to make sure that all your clients are aware of this. Remember a promise is a comfort to a fool! Whether their invoice is a couple of weeks over or a couple of days, Cobra Financial Solutions are here to help. As soon as the account is falling overdue, or you are having concerning insights into an account, don’t delay. Get in touch with our experienced debt collectors who will be happy to help you.
4. Ignoring how much debt recovery will cost your business
A businesses fortune can change very quickly – going from good to bad. Being on the ball and biting the bullet right from the start is a great start. Taking the right recovery steps at the right time can help you to recover what you are owed and minimize any loss. Before commencing any campaign to recover a customer debt, you must evaluate what costs your business will incur in doing so.
If your initial attempts at debt recovery have failed, you’ll need to calculate whether enforcing it is actually financially viable. Knowing your customer is a fundamental rule of business. Furthermore, so too is knowing your debtor! If you have any concerns with collecting B2B debts, get in touch with Cobra Financial Solutions. We have a wealth of experience in recovering B2B debts and analysing what the best options are for your business. We are your local debt recovery specialists.
5. Failing to use effective communication methods
More often than not, a telephone call is enough to persuade debtors to pay. Some debtors respond better to emails or letters, and others are promoted into action by a focused text message.
By investing in some time to find out what methods your various B2B clients prefer will pay off in the end. Once you know the preferred method, use it consistently. Be sure to instigate a cut-off point and if they fail to respond within the given time frame, it’s time to use more formal methods of debt recovery.
6. Failing to collect up-to-date information about the debtor
Failing to keep debtor information records up to date can cause issues further down the line. It can be very difficult for a debt recovery company such as Cobra Financial Solutions to recover the debt for you but it doesn’t make it impossible. For example, if you don’t hold the correct business trading title, or an up to date address, some or all of the debt related paperwork could get returned to you. This will make effective debt collection extremely difficult.
7. Failing to ask for professional help from a debt collection company
Always bear in mind that some debtors can be especially stubborn and you may struggle to persuade them to pay. Often, by engaging the help of a professional debt recovery agency such as Cobra Financial Solutions you’ll see a far quicker and efficient debt recovery process.
With all of this in time, if you are struggling to persuade a client to pay their outstanding B2B debts, consult the professionals here at Cobra Financial Solutions.