Financing a business is quite difficult a task to conduct. Keeping the business running is another hefty task. It gets worse if you have debts to handle. It does not matter whether it is creditors or debtors, there will always be some debt that needs to be controlled. Debt recovery is a really tasking activity, but then with a proper system in place or with help from professionals, you should be able to do it quite effortlessly. If you recover overdue customer payments, you can increase the performance of your business significantly.
Process of Debt Recovery
There are mainly two ways that you can go about the debt recovery process. You can choose to do it by yourself or you can hire a professional debt collector to get that work done. Admittedly, it is really hard for some people to ask for money from their customers regardless of how rightful it is to them. Some customers will always have a plea and excuse for not giving their money. In such a case, the best thing you can do for your business is to hire a debt collecting company to do that work for you.
When you choose to go about the debt recovery process by yourself, there are some things that you really must make sure you have done. These include:
1. Contacting the Debtor with a Friendly Reminder
There are people who will forget that they owe you money and they need just a small reminder so that they can make the payment. With this in mind, you should never allow a payment to be so long overdue to get in touch with the debtor. Any debt review online will tell you that a good number of businesses lose money and customers because they do not get in touch with them. Send the debtor an email, mail or phone them. Be professional about it though!
2. Contact with an Overdue Payment Reminder
In the event that the payment remains outstanding and the customer still has not made any effort to make payment on the next agreed date, get in touch with them again. Send another letter or email reminding them of the money that they owe your business and request for the payment to be made as soon as possible.
3. Send a Final Notice
When the customer has not paid according to the terms of your agreement and has missed any extended payment dates again, drop them a phone call to discuss the outstanding balances and request for payment.
4. Try and Make Physical Contact
In the event that all your emails or letters have gone unnoticed, try and get in touch with the customer physically. This will help you understand the customer better and even build a more personal relationship with them.
5. Send a Formal Letter of Demand
This should only be used as a last resort because it can totally ruin your relationship with the customer. In the event that you find that the customer is not responding to any of your attempts to contact them, you can send this formal letter of demand.