If your business has outstanding unpaid payments from customers, as a collection agency or otherwise, trying to get those clients to make good can be uncomfortable and awkward at best. At worst, it can threaten your business as you also have bills to pay. So what are the methods to use to ramp up the urgency for your customers to make their payments? There are a number of approaches that range from more passive to more aggressive. Anything from circling invoices to utilizing a collection agency merchant account can be effective for protecting your business from delinquent payments.
Debt Collection Tools
The first tool in your tool belt is being proactive. Letting things slide creates a relaxed relationship that does not foster prompt payments. Don’t let outstanding debt slip from the awareness of your customers and clients. Doing so will only reinforce this behavior pattern.
You can remind your customers by circling and emphasizing unpaid accounts on invoices. This is a soft approach to drawing attention to unpaid debts. Phone calls following up on debt are a more direct approach forcing a one-to-one interaction regarding the unpaid sum.
The most aggressive approach is to utilize a debt collection merchant account. Debt collection agencies should be blaring alarm bells for business owners as they raise the very real possibility of serious consequences aside from bad credit. If there are no other options available and your own payments are looming, this direct approach may be necessary—and it will most likely get results as businesses shuffle assets to avoid negative repercussions from a collection agency.
Managing People Not Accounts
In the debt collection business and for any business owner trying to collect what is owed to them it’s important to remember that you’re trying to manage individuals and not a list of unpaid accounts. Managing people can be far more complicated than reminder memos. Different individuals and businesses will have different practices regarding how they manage their accounts. Some will respond to gentle reminders while others will require more forceful action. The best approach is to be proactive with a velvet-over-steel approach; being smooth and soft on the surface in communication belying a steely reserve regarding on-going delinquent payments.
Collecting what is owed to your business is an uncomfortable process with little margin for error. An effective manager of unpaid debt manages not just the financial aspects of the account, but also the individuals involved on the other end. Setting a time line for increasing reminders and pressure for payment that facilitates the customer’s payment is the gold standard for debt collection.
To get started with a no hassle collection agency merchant account click below