In order to ensure you know everything you need to keep your small business’ accounts in the red, this week Axis for Business shares five tips for collecting bad debt.
Out of Pocket
As an independent energy and telecoms provider who searches to find the best deals for you, Axis for Business understands what it means for a small business when they are confronted with a serious case of bad debt.
If the customer won’t pay, your business is the party that’s left out of pocket. If you allow bad debts to stack up, it could deplete your profit margins, and impact the growth prospects of your company.
Collect Outstanding Debts With These Five Tips
That’s why you need to know how to deal with bad debt, and the following five tips should help you ensure you can collect any money you are owed…
- Strike the Right Tone: If you ring a customer and threaten to bring down hell to get your money back, you’re only going to scare them away. Strike the right tone when you are communicating with the holder of a bad debt so you don’t alienate them and blow your chances of being paid back.
- Explore Every Avenue: A customer won’t always answer their phone, or their emails might accidentally go into the ‘junk’ box. In other words, they might miss your messages. That’s why you need to use every method of communication at your disposal; phone, email, post etc., to collect a bad debt.
- Keep Records: Make sure you keep a record of every phone call, every email etc. between you and the customer in question. That way, if a customer tries to renege on an agreement to repay you can remind them of their obligation.
- Be Open to Negotiation: Some repayment is better than none. If a customer is willing to pay at least some of the money back, then the debt won’t be a total write off. Leaving yourself open to negotiation could help you collect a bad debt.
- Employ the Services of a Debt Management Company: If all else fails, there are businesses specifically designed to help you collect a bad debt. They are called debt management companies, and with their expertise you can ensure you aren’t forced to write off a bad debt.
Extract the Venom
Bad debts are poison to a business’ profit margins. Don’t let bad debts build up. Extract the venom, so that bad debts don’t come back to wreak irreparable damage to your business.