Running a business day in and day out is often a thankless job.
Your employees don’t always know, or care, about what it takes to keep the lights on, cover expenses, meet payroll and make sure you pay yourself as well for all your hard work and effort.
And today, more than ever, you face other challenges.
Finding new customers or clients for your products or services in a “down” economy can be demanding. And even your best customers can fall behind on their payments to you.
Successful B2B collections
Running a web marketing company I’m not immune to these challenges. In fact, last year alone I had 4 customers fall behind on invoices. Despite having signed contracts and agreements for services they simply couldn’t, or wouldn’t, pay the bill.
Sure, I stopped all remaining work for them.
But the fact remains that the time and effort spent on their behalf was, ultimately, wasted. After all, time is money — and not getting paid for time spent on each of their projects that could have been used elsewhere was a real loss, for me and for just about any other business in a similar situation.
Even late payments can be a problem.
When a customer falls behind by more than 30 days it upsets smooth cash flow, placing unnecessary stress and hardship on a business. For example, if it’s a very good customer do you continue providing them with goods and services, or offer them terms or payment plans to get them back on track?
The bottom line is that there are three basic reasons why someone falls behind on their payments to you:
- don’t want to pay
- having trouble paying on-time
- can’t pay
And in each case collecting even a portion of what’s owed matters.
Excuses, excuses, excuses
Let’s get real for a moment… some customers can be a real pain in the behind.
Run a business long enough and you meet and deal with all types. And sometimes you end up with customers or clients who I like to call the “chronic complainers.” Nothing is ever good enough for them.
And these types generally to fall behind on payments.
And then justify why they’re delinquent. When you ask them why they haven’t paid the bill they are likely to hint, or outright tell you, that they are withholding payment because you failed to deliver the goods, so to speak.
The question is, what do you do with people like this?
When a customer fails to pay their account on time you should communicate with them early in the process. Don’t let the situation go, and don’t assume that they’ll catch up on their own. Only after assessing the situation for yourself can you decide on the best course of action.
Be prepared for all sorts of excuses. And if necessary get a professional involved early on in the process.
Believe it or not a professional commercial collection agency will not call to harass your customers or clients. In fact, the hallmark of a professional agency is that they collect on your behalf AND help you maintain a good relationship with your customer or client… provided, or course, that you want to maintain it.
The cash-flow crunch
Sometimes your customer falls behind because they are waiting on payments, too.
Should this be the case you can always extend terms or credit for your best customers. If they typically pay you a lump sum fee perhaps you can break the outstanding payment into smaller installments.
If you accept credit cards it’s fairly straightforward to do this.
Just be sure that the customer or customers you extend credit to aren’t on the verge of going out of business. After all, once someone declares bankruptcy the game changes.
As always, regular communication can provide a much-needed heads up if a customer’s business is struggling and the account is at risk of not being paid.
Going out of business
Businesses come and go.
A few years ago I had a good working relationship with three business partners. And despite their honest struggle to keep the doors open they were going under, and fast.
They owed me a few thousand dollars and knew it.
The best part for me was that they were honest about their situation and genuinely felt bad about not being able to pay me the full amount. Other creditors were lining up against them as well. So rather than take them to collections, I offered them a reduced settlement provided they could pay the bill in a single installment.
I also let them know that I’d be happy for any referrals they could send my way. Since they were pleased with the work I had done for them and were grateful for how I handled their delinquent account they did refer me to other businesses who, in turn, became clients.
The new revenue that was generated more than made up for the loss.
So what’s the moral to the story?
Once a business files for bankruptcy you pretty much have to stop your collection efforts. At that point the courts will decide whether or not you will collect any money, and how much you may or may not be entitled to.
In my case I was able to handle it in-house because of who I was dealing with, allowing me to know what was going on before the axe fell, so to speak.
However, your situation may be different.
Which is why getting professional help matters. Hiring the right commercial collection agency with experience in your niche or industry is the best option for ensuring that you collect some, or all, of what’s owed to you. And letting them negotiate on your behalf protects you from any liability when it comes to compliance with all applicable collection laws.
Does that make sense to you?
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.
This way you can save time, money and aggravation by hiring a professional who can help you collect some (or all?) of your outstanding accounts receivable.
After all, when you get down to it you really have two choices:
- you can keep doing what you’re doing (and hope for a different result), or
- you can find a commercial collections agency that can help you recover what’s rightfully yours.
Either way it’s your money… you decide.