Small-Business Collections Policies
The longer a business customer’s account goes unpaid, the more difficult it is to collect. In the field of accounts receivable, time is money. As an independent businessperson, you’re your own collection agency unless a bill goes really delinquent, which you can try to avoid by using the following steps:
Get personal. When a bill is past due, don’t rely on e-mail or letters; pick up the telephone. Ask to speak to your contact for the project. Get the names of the people in accounts payable or purchasing and call them. Make appointments to visit in person.
Be persistent. The squeaky wheel gets the grease, as the saying goes. If other creditors are trying to get money, the more persistent you are, the closer you’ll get to the front of the line.
Be pleasant. Ask whether there is a problem with the bill. Perhaps it’s held up awaiting approval or maybe a line item is being questioned; you won’t know if you don’t ask. Your queries may uncover customer service issues or may even generate additional sales. Ask and then listen.
Don’t wait longer than 60 or 90 days. If all else fails, take your case to court. Small claims courts resolve disputes involving small amounts of money — usually under $10,000. You can represent yourself, and the process is relatively quick and inexpensive. (If it’s any comfort, you aren’t alone. Debt collection is the most common case heard in small claims court.)
Get proactive by establishing credit policies before the need even arises. Local collection or credit bureaus often provide free planning advice plus they stand by to serve as collection agents for delinquent accounts.