Debt Collection Good Practice
All business whether big or small can benefit from having good practices in place when it comes to recovering debt. The main objective of debt recovery is usually to make sure that it doesn’t reach a recovery process in the first place. In other words, how can you help to make sure that your invoices are paid on time and that you have followed good practice?
Here are some simple methods which may help;
1. Invoicing on time – try not to invoice for products or services weeks after they have been delivered. Make sure that you invoice on time so that it is fresh in the customers mind and that they are appreciative of the good service you have provided.
2. Invoicing accurately – This may sound simple, but customers need to know exactly what they are paying for. Making your invoicing transparent with an exact breakdown of services will help to ensure that payments aren’t delayed by misunderstanding.
3. Provide account statements – by sending your customers regular statements with details of all transactions will make sure that they are kept fully up to date with their account status and may prompt payments if they are owing.
4. Reminder letters – Gentle reminder letters will ideally send a polite but firm prompt for payment. At this stage the payment could only be maybe a week late, but getting on top of the process sooner rather than later is more likely to achieve results.
5. Telephone calls – Although you may not have the time or resources necessary to make debt recovery phone calls, it may save you a lot of time and problems further down the line. Ensure that you speak to the person to whom the invoices were addressed. Discover if they have any issues with the invoice and that they have indeed received the statements. Agree a plan of action by the end of the telephone call.
6. Follow up letter – you should always follow any telephone conversation with a letter that defines the conversation and agreed actions including any dates and amounts discussed.
7. Final Reminders – a final reminder needs to detail what will be done if the payment is not received within the specified time. i.e. will you be taking statutory action or passing on the debt for recovery?
8. Legal action – this is the stage that we hope not to reach, but sometimes this is the unfortunate situation many businesses find themselves in and it is always time consuming and stressful.
Churchill Recovery Solutions can take the stress out of your debt collection process. Initially we can ensure that your business has efficient practices in place for invoicing and following up with debt recovery. We can then handle any legal action or small claims court cases should it reach this stage.