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How To Collect Debts From Clients Without Losing Their Business
As a business owner, your number one priority is to constantly expand your customer base. You work hard trying out new promotions and providing the utmost level of customer service all to gain their trust. When it comes time to collect on the payment that is owed to you for the products and/or services you rendered, you expect it to be easy.
Some Customers Won’t Pay
The truth is that sometimes your customers just simply won’t pay. It could be due to a lack of funds or disorganization. Either way, you’re going to have to collect on that debt so that your business can thrive. As a business owner, you must go into every new customer relationship knowing that there’s always a likelihood that some customers won’t pay.
You should always expect a small percentage of your customers not to pay their bills. It’s like being a credit card company. They anticipate a certain percentage of their customers to default on their lines of credit. This way, they can factor the lost revenue into their budget. You should be doing the same thing so that you don’t end up falling short on cash when you need it most.
The Worry About Losing Their Business
The biggest threat of trying to collect a debt from your customers is the thought that you may lose their future business. You’ve spent a great deal of time investing in recruiting these customers and you don’t want to see that time go to waste. You just want them to pay their bills and continue to do business with your company. That is the ideal scenario for any business owner.
It’s important to take a look at the big picture. They bought your products and/or services and didn’t follow through on their side of the obligation. You and the customer both know that. So, it makes complete sense that you would try to collect on the debt that is owed to you. That’s not going overboard by any means. Rather, it’s ensuring the other person follows through on their commitment to you. You held up your end and, now, it’s time for your customer to hold up their end of your agreement.
Sometimes It’s Best To Cut Your Losses
While you shouldn’t go into every collection case trying to get payment with complete disregard for trying to keep the customer’s business, you should have a fair outlook on the overall situation. While it would be nice if they continued to do business with you, that only holds true if they pay their future bills.
If they’re not paying their bills with you right now, you don’t want to extend any more of your products and/or services. That will just cost you more money that you may not be able to collect on. While you may value their loyalty, you must ensure the future of your business first.
Handing Debt Over To A Debt Collection Firm
The best approach for collecting on owed debt from your customers is to put a middleman between you and the customer. This comes in the form of a Boston debt collection firm. You simply hand over the information regarding the debt that is owed to you and the customer. Then, let the debt collection firm take care of collecting on the debt.
This will take everyone from your company out of the equation. The debt now becomes an issue between the customer and your Boston commercial collection lawyer. You can let customers know that you don’t handle past due debts in-house. Rather, all their questions and concerns about the debt must go through the collection firm. It’s much easier to maintain a relationship with the customer when you put a middleman company in between the two of you.
Collection Attorneys Have Specialized Knowledge
When it comes to collecting on a debt, the best people to do it are the ones that collect on debts for a living. Your collection attorneys will have specialized knowledge about what works and what usually isn’t successful. They know that you want to salvage the relationship with the customer, so they’ll collect on the debt in a manner that makes that possible.
Just having a law firm contact the business that is indebted to you is usually enough to encourage them to pay their bills. When an attorney is involved, people tend to get scared about the idea of a lawsuit. So, they immediately work to remedy the situation before that happens. You can use this information to your advantage to collect on debts that are owed to you.
Remember It’s Your Payroll That’s Harmed
When you get the notion to push off collecting on past due debts from your customers, remember that it’s your payroll that is getting harmed. When they don’t pay you what is owed, you have to find another way to pay your employees. This is a big challenge that many business owners face from time to time.
While there are some short term solutions out there such as invoice factoring and commercial lines of credit, they all cost you money to employ. Essentially, your past-due customer is causing you to pay extra just to meet your payroll needs. That’s not fair for you to have to deal with just because they didn’t pay their bills. Realize that your business’s future should always be on your mind when considering debt collection practices with past-due clients.