Debt recovery: a guide for small business owners
Being owed money is a frustrating situation that is sadly all too familiar for many business owners. So, what should you do if you’ve sent the invoice and the client still hasn’t paid what they owe you? What if they are flat out refusing to pay for the work you’ve done? Read on for our practical guide to debt recovery…
1. Follow up
If someone owes you money, the first point of call should always be to send a friendly reminder to the debtor. After all, the client may simply have misplaced the invoice, or perhaps they were away on holiday or were dealing with family illness at the time.
If the client is refusing to pay the invoice, you should make reasonable efforts to find out exactly why they are unhappy and address the situation. Don’t be afraid to pick up the phone and talk it over with the client; sometimes a simple five-minute conversation is enough to resolve things.
Although you might feel extremely angry and frustrated, it’s always best to keep communication polite and courteous at all times. It can be tempting to fly off the handle, but that’s ultimately unlikely to get you the result you are looking for.
2. Consider if it is worth pursuing
Another thing to consider is whether the amount owed is actually worth pursuing. For example, if it’s only a very small amount, it might be better to let it go and instead put your energies into more important tasks. You also need to consider the costs of pursuing the debt and any fees you might have to pay.
3. Send the debt to collections
If you decide you want to pursue the debt and you’ve tried all self-initiated avenues of debt recovery without any success, now is the time to contact a debt collection agency. A reputable collection agency can pursue the debt on your behalf and will have the experience, knowledge and skills needed to make a successful recovery in an efficient and timely manner.
Always make sure to choose a reputable debt collection agency that possesses the skills and experience in the relevant area of debt recovery. In addition, make sure you fully understand the costs involved before committing to use the agency.