If a customer owes you money then all you need to do is ask for it. If only it was that simple!
In difficult economic times many businesses are finding it difficult to collect money owed to them. Maybe it is something to do with the British? We don't like confrontation and we find it hard to ask for what we want/need. Some customers have always been late payers in good times and bad so even now managers are saying to themselves or their credit controller; "Don't worry they always pay in the end." Alarm bells only start to ring when a usually good payer starts to get a bit late.
How can we avoid confrontation turning ugly with a longterm customer? A positive confrontation is one that is intentionally created by you to get you the result you want within controlled limits without harming yourself or your customer. Personal dignity is a persons most cherished possession - so, if you want cooperation, don't attack a person's dignity.
When asking for money make sure you know exactly how much is owed. Again, sounds simple but if there is any confusion/debate at this stage it can hold things up. People often don't pay because they simply think "I never ordered these so I won't pay, if they chase me then I will bring it up then." So keep good records and review them as part of your preparation for any discussion over accounts owing.
Communication is vital in business to achieve results but even more so when collecting debts.
Are there any ways to remove the stress of the whole business. Options open to businesses are the following;
Factoring or invoice discounting
Employing an outside debt collecting agency
Factoring suits some businesses such as printers and recruitment companies but you will have to pay a proportion of the amount owed to the factoring company.
A debt management company can help but they must be chasing an unarguable debt for them to be effective and again they will take a commission.
If you are having any cashflow difficulties then give us a call. You might want to take a look at our page on managing cashflow.