Unpaid Debts: 4 Ways To Make The Collections Process Easier
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Unpaid Debts: 4 Ways To Make The Collections Process Easier

Let’s face it, you nor your employees like making the calls to remind customers that they have an outstanding balance that must be paid. Having a long standing, friendly relationship with certain customers makes this task even more difficult and awkward, but not collecting your unpaid debts could do your business a lot of harm in the long run. If you worried about saving face for every customer you liked, you would be footing the bill and costing your company hundreds or thousands of dollars overtime. As hard as it may be, you must separate personal matters from business matters, and collections is just a part of business. Here are a few things to keep in mind to make the job easier.

1. Make Employees & Customers Aware of Your Payment Terms and Policies

It may seem like a no-brainer, but first and foremost, you need to ensure that all of your company’s employees are aware of your payment terms and policies. Make sure your staff knows when certain payments are due, when to collect them, and which customers qualify for any special payment negotiations or plans if applicable. The collections process can be made even simpler by only allowing a few specific people to take care of collecting unpaid debts. If your finances allow, this can even be done in the form of a collections agency. Similarly, you need to make sure all customers are aware of these same payment terms and policies. This can be done in the form of a paper document which they sign, or simple signage in your establishment. Everyone must be on the same page and held accountable when it comes to unpaid debts and collections. It is the only way to protect your company and the money it is owed.  

2. Offer Payment Plans

It doesn’t hurt to be a little lenient here and there when it comes to collecting unpaid debts. If a customer has a large bill to pay, consider offering a payment plan. This doesn’t have to be done with all products or services, but maybe just a few that come with a hefty price tag. Maybe customers can leave a deposit and pay the remaining balance in a few days, weeks, or even months. The options are up to you, but remember to update your payment terms and policies.

3. Go Paperless

We now live in a digital and electronic age. Sending collections notices in the mail can often go unseen, lost, or ignored. An easier way of keeping track of unpaid debts is by offering electronic invoices and electronic payments on debts. Customers can forget about receiving a paper invoice and mailing a paper check, instead making an automatic electronic payment and keeping the electronic invoice on file in their email. Similarly, it will be much easier and faster for your business to receive payments and keep track of invoices and documents.

4. Ask for Payment Upfront

Lastly, you do have the right to require payment for products, goods, and services upfront – just make sure this is highlighted in your payment terms and policies. Requiring payment in full at the time of sale is okay. You can make this process a little easier by accepting all of the common payment methods: Visa, MasterCard, Discover, American Express, PayPal, other debit and credit cards, cash, and checks.

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