Five Tips for More Efficient Debt Collecting

Every company is unique so the debt recovery procedures you employ will need to be tailored to your business. There are a few fundamental elements and processes, however, which stay the same regardless of the business. Keep a close eye of aged receivables and be consistent in investigating overdue accounts. This will help you to keep track of debtors. Follow our five tips for more efficient debt collecting and you will see improved procedures and a subsequent reduction in outstanding debt.
 
1. Efficient invoicing
You should give your customers every opportunity to pay their accounts promptly. That means efficient invoicing on your part. Best of all, include an invoice with the goods at the time of delivery. Alternatively, consider invoicing via e-mail. That way you know that the customer has received your invoice and you have given them as much time as possible to pay.
 
2. Good customer relations
If you have a good relationship with your customer, you are more likely to be able to avoid or resolve any issues relating unpaid accounts. Relations should be friendly but always professional. Make sure you are always up to date with your customer's account and contact details. Incorrect information could mean that your invoices don't get to the right person, causing a delay in payments. Similarly, it is vital that you keep them informed of any changes to your own details. If you don't, then you will only have yourself to blame if payments go astray.
 
3. Keeping on top of outstanding accounts
Keeping on top of outstanding accounts will reduce the chances of debts building up. At the end of every month, follow up all outstanding accounts. Many unpaid invoices are the result of simple oversights. Send out clearly marked reminders, drawing your client's attention to the outstanding invoices. A phone call at this stage can also help move things along.
 
4. Collections policy
Recovering debts can be a tricky business. A clear collections policy is a vital tool that will help you negotiate this sensitive area. Create and implement a policy that details what to do when a customer refuses pay. Having clear strategies in place will take some of the pressure off your accounts receivable department and will help them to act professionally and efficiently. This policy should also clarify the point at which the debt should be passed on to a professional debt collection agency. These agencies will give you the best possible chance of recovering your payment and will prevent you wasting too much time pursuing the debt.
 
5. Monitoring aging receivables
Monitor your aging receivables and keep a look out for any customer accounts that are regularly outstanding after 60 days. Highlighting regular offenders will let you focus on these accounts before the problem gets out of hand. Send these customers a letter reminding them of your terms of business. If the problem persists you may have to end their line of credit.

Every company is unique so the debt recovery procedures you employ will need to be tailored to your business. There are a few fundamental elements and processes, however, which stay the same regardless of the business. Keep a close eye of aged receivables and be consistent in investigating overdue accounts. This will help you to keep track of debtors. Follow our five tips for more efficient debt collecting and you will see improved procedures and a subsequent reduction in outstanding debt.
 
1. Efficient invoicing
You should give your customers every opportunity to pay their accounts promptly. That means efficient invoicing on your part. Best of all, include an invoice with the goods at the time of delivery. Alternatively, consider invoicing via e-mail. That way you know that the customer has received your invoice and you have given them as much time as possible to pay.
 
2. Good customer relations
If you have a good relationship with your customer, you are more likely to be able to avoid or resolve any issues relating unpaid accounts. Relations should be friendly but always professional. Make sure you are always up to date with your customer's account and contact details. Incorrect information could mean that your invoices don't get to the right person, causing a delay in payments. Similarly, it is vital that you keep them informed of any changes to your own details. If you don't, then you will only have yourself to blame if payments go astray.
 
3. Keeping on top of outstanding accounts
Keeping on top of outstanding accounts will reduce the chances of debts building up. At the end of every month, follow up all outstanding accounts. Many unpaid invoices are the result of simple oversights. Send out clearly marked reminders, drawing your client's attention to the outstanding invoices. A phone call at this stage can also help move things along.
 
4. Collections policy
Recovering debts can be a tricky business. A clear collections policy is a vital tool that will help you negotiate this sensitive area. Create and implement a policy that details what to do when a customer refuses pay. Having clear strategies in place will take some of the pressure off your accounts receivable department and will help them to act professionally and efficiently. This policy should also clarify the point at which the debt should be passed on to a professional debt collection agency. These agencies will give you the best possible chance of recovering your payment and will prevent you wasting too much time pursuing the debt.
 
5. Monitoring aging receivables
Monitor your aging receivables and keep a look out for any customer accounts that are regularly outstanding after 60 days. Highlighting regular offenders will let you focus on these accounts before the problem gets out of hand. Send these customers a letter reminding them of your terms of business. If the problem persists you may have to end their line of credit.