5 Smart Tips on Recovering Your Business Debts

Rather go to bed without dinner than to rise in debt.

– Benjamin Franklin

It goes without saying that money bolsters relationships and it also breaks relationships. But the word ‘debt’ has a lingering and ominous effect on both families and businesses everywhere. Absence of prompt payment is something that everyone has to struggle with at one point or another. Handling your debt recovery process may be difficult but it’s not intractable. The trick is to know how to balance recovery of debt with maintenance of good relationship with your debtor.

Follow the 5 tips given below to tackle your debt collection issue effectively:

  1. Run a credit check: Before lending money, go for a preliminary credit check on your clients to ascertain their creditworthiness. A little diligence at the beginning will save a lot of pain in the long run. Know your customers, their ability to pay back, and see if they have a history of defaulting.
  2. Determine the issue: Find out why a particular customer hasn’t paid till date. Is it just an oversight or a problem that runs deeper? Determine whether they’re just unable to pay or unwilling to pay. After this, you can chart your course of action accordingly.
  3. Have a payment plan: Put in place a reasonable payment plan that can be a sigh of relief to those struggling with funds. Make clear your standard terms of payment. To get paid back in installments is far better than not getting paid at all.
  4. Engage licensed debt collectors: Seek out only trustworthy debt collectors to serve as agents of your debt recovery task. Make sure they’re licensed and registered with an authoritative collection body to give credence to the whole process.
  5. Make it professional: Tackle with late payers who’re well past their dues professionally. Don’t get overtly emotional; it’s not the end of the world. Be in control of the matter and explore all available options before jumping to conclusion.

Being debt-free is everybody’s wish, but unfortunately sometimes you’ve a brush with defaulters. The sign of a seasoned business entity is recovering their debts with composure without the need to take legal recourse or confrontation.