When it comes to collecting from a business client or customer, things can get a bit dicey… especially if they happen to be one of your best customers.
Then again, your best customers or clients don’t fall behind on their payments.
So how does business debt collection differ from consumer or commercial collections?
10 “how to” tips for successful B to B collections
Some basic principles you may want to follow to make business-to-business debt collection easier or back on track. In no particular order they are:
- List the due date on each bill
- Bill immediately after the sale
- Foster relationships
- Never harass
- Track billing
- Be aware of debt collection laws in your state
- Keep good records
- Negotiate
- Notify customers before you send an account to a collection agency
- Notices of Bankruptcy should be tracked
Decide whether payment is due upon receipt or if the customer can pay net 15 or 30 days. Placing due dates on bills might place your company at the top of the list to get paid.
Bill immediately after the sale, even if your practice is to offer the term of Net 30 days, you will be more successful collecting on time if bills go out promptly.
Foster relationships.
Businesses that feel they have a relationship, especially if they know the person by name in your A/R department, will be more likely to pay on time. Never harass. It is good business practice to be considerate and work with customers. This yields more sales in the future and keeps communication lines open.
Track billing.
Stay on top of bills that are 15 days past due, don’t wait until they are 60 days past due.
Be aware of debt collection laws in your state. Familiarize yourself with the laws in your state that govern business–to-business collection. If you ever go to court, know you have followed the letter of the law. For example: companies that often threaten to seek remedy by seizing property may be breaking the law. It is illegal to seize property unless the goods you sold were secured by collateral.
Keep good records.
Make sure each contact is documented. Be clear. Always write demand letters early on. Don’t wait until an account is 120 days past due.
Negotiate. Often debtors are anxious to negotiate if they are having a tough time. They may want to make payments but can’t due to an illness or bad economic factors.
Notify customers before you send an account to a collection agency.
Notices of Bankruptcy should be tracked. Research your customers who are late making payments. A bankruptcy may be on the horizon. Trying to collect early might benefit you, rather than waiting for .10 cents on the dollar.
Find a debt collection agency today
To find a collections agency that specializes in helping business likes yours, simply request a free services quote from qualified and reputable companies.
CLICK the link and compare free collection agency quotes today.
Or you can follow the link for our list of collection agencies and research providers for yourself that can help you get set up for your State or Metro area.
After all, at the end of the day you have only 2 choices:
- keep doing what you’re doing and hope for a different result
- or get outside, professional help with your outstanding accounts receivables today
Either way the choice is yours.
