As in case of every business, it is especially true for small businesses to remain in operation only when a healthy flow of income is supporting its everyday prerequisites for resources and inspiration. Without satisfactory and viable returns, no business can possibly continue. Stilted flow of returns, bad debts and lack of growth over a given period of time are serious deterrents to business operation and this is why it is important to appoint separate professional departments for handling the different sections of returns. Debt collection remains a key function, demanding for a specialized team of experts who have had enough experience in the concerned industry regarding coercive collection and have the tools up their sleeves for discreetly pursuing even the most delinquency minded clients into paying up the dues.
Why it is so crucial for new businesses?
Established businesses remain popular in the field by the means of good reputation, word of mouth and paid publicizing. Even when severe debt failures cause distress in its workings, established businesses could go by just fine for a while. However, small startups with limited means cannot survive a collapse in returns. The entire funds of small business enterprises are for immediate investment, no backup to speak of. In technical terms, for small businesses, problematic bad debts can amount of the entire discrepancy between profitability and net losses. Experts say, for new enterprises debt collection could become a rather litigious process.
Here are a few tips case specifically, for small businesses regarding how to manage and avoid debts and the role of a third party business collection agency in the matter:
Scheme out a Payment Policy
Hire a third party debt management firm for tackling your debts and payments, they will create a fully formalized payment policy and hand them out to your customers. Professional policymakers are needed for drawing up the document in clear yet effective language.
- Ask your collection agency service to execute late fines to encourage on-time payments.
- Make sure about advance payments before providing the services. You can make it 50% of the payments upfront.
The major plus-point of doing it via a professional collection agency is that you can be relieved that all the drawn up clauses remain perfectly within the boundaries of legal appropriateness.
You must have come upon one of those invoices that say “payment due upon receipt”. That’s a very effective way to let the people you deal with know that you are aware of every penny being put on due in the bill book. A caution word for immediate remittance of the dues on the invoice always works like wonders. Your debt management agency will know the exact language and form to adopt to get this effect.
Keeping Contact and Sending Reminder Bills
This is the most important part of the deal to be taken care of by the professional collection teams. You don’t want to spend your valuable entrepreneurial time upon such trivialities which is nonetheless extremely important for getting back payments, which can readily go past due without proper attention.