How to collect outstanding debts
Every organisation seems to have errant debtors. And, although your formal management training might not have included debt recovery, you can be sure that others will look to you for guidance and assistance in collecting outstanding debts. By adapting the following simple suggestions to your own situation, you will largely satisfy those expectations...
1. Reject the myths of debt collecting.
Myths associated with debt collecting have plagued businesses for years.
They're only myths. Reject them!…
- Bad debts are part of being in business. If you don't have them, you can't be doing too well. The truth is: successful businesses ensure that their debtors' lists are minimal.
- Pushing for payment of bad debts isn't good for business. Being too pushy will lose you a customer. The truth is: do you need a customer who's costing you money?
- Making people pay on time is difficult and expensive. The truth is: it's possible to collect your money simply and inexpensively.
2. Decide if the debt is really worth pursuing.
Not all debts are worth chasing. Two variables to consider are the size of the debt in relation to your overall work in progress, and the time it will take to collect the debt. For example, a Fortune 500 company may be prepared to write off a $10,000 debt; a small business could go to the wall if it ignored such an amount.
3. Be persistent.
Once you decide that a debt is worth pursuing, you must be prepared to persist, using a variety of techniques, until the money is recovered. Don't wait to see if something happens - make it happen!
