Outstanding accounts from debtors can cause a lot of problems for businesses. With plenty of debtors, cash flow will soon become a problem and your company might not have the necessary funds to restock supplies, pay staff or contractors, or grow and expand. 

If outstanding debt from clients is dragging your business down then it is time to improve your debt collection methods. Here are some of the best strategies that keep your business from suffering.

Start With Accurate Information

Start by ensuring all information on accounts is 100% accurate. Mistakes like misspelled names or incorrect personal details can make your business seem unprofessional. Errors like improper account totals, on the other hand, can spark some heated arguments with your debtors and can also tarnish your business reputation. Other issues like incorrect addresses or contact numbers, on the other hand, will make it impossible for debtors to receive statements and they might not even realise that they have outstanding dues.

Your Invoicing System Should be On Point

It can be challenging to keep track of the due amounts when numerous variables should be considered. Your invoices should reflect the due amount, plus extras (if allowed) like account fees, interest rates, penalty fees, payments received, and additional purchases made. A clear statement of history puts the client’s mind at ease and gives them a clear view of the exact amount that is due.

Credit Limits Should be Limited

Over-extending your credit limit puts your business at risk. It is important to set a credit limit for each client category. This credit limit can be a bit larger for more secure customers, those with a longstanding history with your company, or larger vendors. The credit limits should, however, be kept minimal to keep buyers from taking no more than they are financially able to pay off. 

Regular Communication is Crucial

It is important to stay in touch with debtors. Invoices should be sent out to clients as soon as purchases are made or services have been completed. The client should then receive a monthly statement to remind them of due amounts. Bad debtors or debtors that fail to pay up need to be contacted more often to encourage payment.

Keep Track of Bad Debtors

It is easy to neglect debtors with overdue amounts, especially if these individuals are difficult to communicate with. It is, however, important to regularly reach out and remind or communicate with these clients. 

If keeping regular contact becomes burdensome then it is always possible to turn to debt collectors for assistance. These individuals will regularly contact the client on your behalf, they use a variety of communication channels to remain in contact and will ensure that professional conduct is always maintained while reaching out.

Use Debt Recovery Companies

Bad debtors that have been unresponsive for some time cannot simply be ignored. Bad debt cannot be written off unless your company does everything in its power to recover the due payments. 

If debtors haven’t been paying up then it is best to hand their profiles over to a debt collection service. These companies are the best when it comes to recovering bad debt and greatly increase your chances of financial recovery. The best part about using debt collectors is that it won’t cost you anything. Debt collection services only charge a small amount for overdue accounts if recovered. 

If all recovery strategies have failed, the debt recovery company will provide you with enough evidence that you did all you could to recover debts. You will have sufficient documentation and can effectively write off bad debt so your business can move on.

Professional Help With Debt Collection

If debtors are getting out of control or your business is having a tough time keeping track of overdue accounts then it is best to contact the experts at Vic Collect. Our company specialises in debt collection and can take full charge of your outstanding debtors so you can focus on running your business.