No California business owner can manage operations and keep their business running smoothly if there is a cash flow issue. It is imperative that clients pay their bills promptly because all companies need reliable money coming in for their goods or services. After all, companies that are expecting to get paid by their clients also have financial obligations of their own to pay. Reducing unpaid invoices and minimizing debt are essential to running a business.
Having clients with outstanding debts can make it very difficult to run your business. And, even if your services or products are the best on the market, there is still the chance that some number of the clients that buy from you will fail to pay on time. This could happen by mistake. Perhaps a client without outstanding debt simply missed your invoice. Or, this could happen because a client is unable to pay you what you are owed.
Being a business owner means wearing many hats including anticipating the reality of non-paying clients. Familiarizing yourself with debt collection strategies can help you keep your business and finances on track.
Debt Collection Tips for Small Businesses
Debt collection can be a daunting task to tackle. Still, it is necessary to resolve debts because positive cash flow is essential for any business. Any of the following strategies for debt collection can help your business recover the money it needs to thrive.
Make Invoicing Clear and Understandable
You should have organized and clear invoices that have key information such as the date the invoice was issued, the contact information of your company, an invoice number, an itemized list of services or products and their cost, information on terms of payment including all types of acceptable payment methods, when payment is due, late fees that may be applicable and more. Making your invoices clear and understandable will help your clients know exactly what they are being billed for and when payment is due.
Establish Billing Communications Guidelines
Whether you use email or an app, you should have a strict policy on follow-up. When payment is not received by a certain time, then a follow-up email may be the first line of contact. This could happen within the first couple of days that a payment is late. However, when a payment is late for 14 days or longer, then all communication should be more direct, and done by phone.
Practice Empathy and Flexibility
Sometimes a client may find themself in a challenging situation financially. Here, being empathetic to the situation and allowing for agreeable payment plans could keep the relationship amenable while also recovering debts owed.
Don’t Go It Alone
It is never ideal to have issues collecting payment, and it can be difficult to figure out the best approach for recovering money that is due. A Los Angeles commercial debt collection attorney at Leiva Law Firm can assist you by providing several debt collection services. As resourceful debt collection attorneys, the legal team at Leiva Law Firm knows how to secure the money you deserve. For more information, please call (818) 519-4465 to schedule a free consultation.
