Staying on top of late payments and debts is critical to business success. Unfortunately, debts can sometimes rack up fast especially if you have multiple areas which demand your focus and attention.
Here’s a few tips on what you can do to keep the money people or businesses owe you to a minimum:
Keeping your business owings to a minimum
Want to start minimising the money people owe to your business? Here’s what we recommend you do:
Put a credit control procedure in place
It’s only a matter of time when one of your customers or debtors informs you that their payment is going to be late – that is, if you get lucky as some may not bother informing you at all!
So, as soon as you find out that the payment is late, send them a 7-day late payment notice. Make sure you follow this up with a phone call in order to eliminate any confusion or disputes.
If they fail to pay you back within this period, don’t waste any more time waiting: get in touch with a debt recovery agency like Cobra.
Get as much information as possible from day one
Before agreeing to conduct business with someone, you should get to know who you are contracting with. For example, is it a sole trader, a partnership or limited company? Simply knowing the name of the business or entity that’s borrowing from you isn’t going to cut it. You should know what their credit status is, along with their full company address and primary phone number. They should also have a presence on social media, as most businesses do.
Set out the terms and conditions clearly
Verbally saying “We will supply a product or service for an agreed amount and you can pay me back in a month” is something that perhaps people or businesses did well over a century ago, but today, you need to put everything down in writing.
Therefore, have a formal terms and conditions document prepared and have them sign it so that they are aware of what your payment terms are. If they violate any of those terms, you can always contact a debt collector like Cobra who can advise you on the next steps.
Maintain a healthy relationship
Finally, in order to ensure that you get your paid on time, it is very, very critical to maintain a good working relationship.
The fact of the matter is dealing with late payments can be quite tricky as you try to uphold relations – it can be a delicate balancing act. A few days prior to the due date, you can always send a friendly reminder via email or text message – whatever the primary mode of contact may be – but if they are outside the grace period and still haven’t paid, there’s no need to threaten them with legal action.
Simply contact an experienced debt collection agency like Cobra on 0151 526 4222 who will approach the borrower in a polite and courteous manner while reminding them what may happen from a legal standpoint, if they refuse or fail to pay back the debt.