How to Collect on Debt without Ruining Your Reputation
Your business’ reputation is crucial to your success in the B2B world. Why? Because astute customers research a company before they do business with them, and that’s true when your customers are other businesses, too.
Anything that damages your reputation could cut off your cash flow. So how do you protect it when you attempt to recover bad debt? Find the answers below:
Don’t Jump to Conclusions
When an invoice goes heinously overdue, it’s easy to believe the worst in your customer; they’re shirking their bill to get your B2B product or services for free.
While some bad apples do just that, others may be late paying because of a simple mistake. Errors in accounting happen — whether you send the invoice to the wrong customer or their A/R department misplaces your bill.
Before you point the finger, get in touch with your customer to understand what went wrong. A quick phone call could reveal human error can be to blame.
Better yet, consider streamlining your A/R department so that you aren’t put in these situations often. A proactive approach reminds your customers of their bill before the due date so that a simple mistake doesn’t let their account fall through the cracks.
Have Compassion for Your Customers
Everyone has felt the crunch due to the lockdown, but some people have been hit harder than others. Your customers may be facing economic uncertainty thanks to the coronavirus pandemic.
If they’re unable to pay their bill due to extenuating circumstances, try to be empathic. That’s a tip from the commercial debt recovery specialists at Summit A*R.
Compassion is at the heart of the Summit A*R collection services, which guarantees a professional, respectful, and ethical debt recovery strategy every time.
Any commercial collection agency that fails to do that isn’t worth your time. Not only do rude or aggressive tactics fail to yield the results you want, but they also scare off good customers.
Business to business debt collection needs to walk a fine line, even if you opt for in-house commercial collections. It would help if you pursued bad debt in a way that gets your cash flowing without making an enemy out of your customer.
Don’t Wait Too Long
It’s not always easy addressing an overdue bill, especially if it’s a long-term customer. The potential to screw this up can be intimidating, but you don’t want to delay this in some misguided attempt to make your life easier.
Eventually, you’ll be sorry; the longer a debt goes unpaid, the harder it is to recover. Your customer will be wondering why it took you months (or even years) to track them down. They may think you’re trying to cheat them out of money or assume you’re incompetent. Neither possibility does any favors for your reputation.
As much as you’d rather avoid this confrontation, it’s in your best interest to nip it in the bud.
But don’t worry if you already find yourself struggling with old debt. An experienced business to business debt collection service can massage payments out of even the most challenging cases.
In a small B2B market, word gets around. If you earn a bad reputation because of underhanded collection strategies, it can have a levelling impact on your ability to stand out from the competition and lockdown sales. Remembering this can help you save face as you recoup what’s yours.