How to collect business debt – the very first area I am going to address is cash. Simply put, many small company owners are not conscious and aren’t able to track their cash flow. They view a day-to-day basis at exactly what is in the bank, without any planning whatsoever.
The most convenient and most basic method to take care of this is using an Excel spread sheet to record exactly what money is coming in, what payments are to be made, what cheques have been composed, what outstanding monies are due in and prepare day by day. So simply put, firstly see exactly what is in the bank, where is it going and what is anticipated to come in.
It is very simple – untill you begin to determine something and track it, it isn’t really under your control.
The next issue is outstanding business debt – have you got debtors that owe your company? Exactly how long are they outstanding? Just ask yourself, what are you going to do, to get that money in?
First of all, think of how you are currently doing business and ask how do you work at present? What are your terms? Have you altered them or made them much shorter? Can you work on COD? Or for service companies, can it be prepayment upfront or possibly in many cases, can it be 50 % upfront. Whatever level of cash you can get in advance, in today’s environment, is cash in hand.
Another point we are going to discuss is collecting outstanding debts. This is everything about really chasing after the cash – the part that no one likes. This has to be done frequently and commonly. Individuals have a belief that they will lose their clients which no one will return. The truth is that these individuals have not paid you – they are not clients. Get your cash in – they understand that they owe you the cash and they understand that you deserve to telephone them and ask for the cash owed to you.
I would encourage that you utilize a script when speaking with them on the phone, so that you are brief, respectful however yet strong. For instance: when does it suit you best to come and pay – today? Or tomorrow? Friday or Monday? Pin them down to a time and day, record that time in your journal and make certain there is a follow up call set up. Establish a system, schedule in your time so that everybody is called and it is tracked routinely. If you have 50 individuals to go after, exercise the number of calls you can do in a day, track them, and jot down who stated exactly what. Have actually a particular cut off point. If it exceeds 3 or 4 telephone call, you have to go and see the individual.
Simply put – he who screams loudest has far more opportunity of collecting monies owed to them.