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.
More often than not, customers will look for your company online and read reviews on how your company operates. If your business has gained a negative reputation from your previous customers and these customers posted negative reviews online, potential customers will likely choose to do business with your competitors. A business with a negative reputation will shoo away customers, and can become the reason why your business will be short-lived.
Anything that damages your reputation could cut off your cash flow. It’ll be challenging for any business to attract customers and earn profit if it has a negative reputation. People work hard to earn money, and they would never spend it for a business that has gained a negative reputation through the years. So how do you protect it when you attempt to recover bad debt and ensure that this doesn’t become the reason why you’ll lose potential and existing customers? 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.
If you run a medical debt collection agency or a similar business, it’s vital that you don’t immediately jump into conclusions; instead, reach out to the customers involved. Jumping into conclusions whenever a customer fails to pay on time will not only lead to stress. This can also put a strain on your relationship with them, especially if you’d later find out that the reason for the delay is an error in accounting, not the customer’s negligence.
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. They might have lost their jobs because of the pandemic or have to make drastic adjustments to their budgets as they have to cover expenses for the entire household because other members of the family lost their jobs.
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. Put yourself in their shoes and think how you would feel when you’re in their situation. Sure, you’re still running a business, but keep in mind that how you treat your customers can significantly affect your brand and image in the industry.
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. The smaller the problem is, the easier it’ll be for you to resolve them.
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 giving you more time and energy to focus on other important aspects of your business.
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.