We all know the difficulties of debt recovery. To make it a little easier for small businesses, here at Lawton Hathaway we have some tips on procedures to ensure successful collect.
Have a look at our debt recovery tips for small business and recover your golden eggs this Easter.
Invoice quickly and efficiently. The sooner you invoice, the sooner you get paid. The invoice should include a thorough breakdown of all costs, dates and details of the product. Make sure the invoice details are accurate before you consider taking further action.
Send this as soon as possible after the end of the stated payment date. The statement simply states the amount owing and the due date. Hopefully, this will be enough to encourage payment, but if not send a reminder letter.
This should be sent fairly close to the statement, perhaps a week later, to show that you are keeping an eye on the debt. At this stage, the letter should be polite, gently reminding the customer that they have not yet paid.
If the reminder letter has failed to work, the personal approach is the next step. Try to speak to the person who the invoices have been sent to.
Talk through the specific details of the product and the dates when payment should have been made, as well as subsequent actions taken. Now is the time to find out if they have any queries over payment, or if they are struggling to pay the bill and wish to pay in instalments.
By the end of the call, you should have agreed a plan of action with regard to paying the debt. Follow the call up with a letter, outlining the details of the conversation.
Final reminder letter
This should outline the action you will take if payment is not made promptly – for instance, refusing future requests for credit or taking statutory action to recover the debt.
If you are unsure about your rights and would like advice on how to recover debt, please get in touch and we can give you the information you need.
If you’d like a free consultation, get in touch.