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It’s increasingly becoming more difficult for companies to collect their receivables, even with pledges of loan collaterals from borrowers. Businesses must, therefore, be conscious of establishing more-defined methods to collect faster. Below are some tips to speed up your collection procedures.
You can begin by establishing a reward system that benefits those who pay early and penalizes those who are always late. There is a clear collection cycle that borrowers sign for and must abide by, so hold them to it. But customers will be more encouraged to pay up faster if, say, you can offer percentages off bills, discounts, or other value-added services to those who do so. You can also waive late charges if borrowers quickly pay outstanding balances.
The billing process should be better streamlined if you are to recover debt much sooner. The premise is that you can’t collect what you haven’t billed. Send those invoices promptly and track billables regularly. Monitoring will be largely helped by having a team dedicated to doing courtesy collection calls, especially for delinquent customers. It could also be that there are mistakes made in inputting the customer address, or that the borrower has changed their email address. That little call goes a long way in expediting the payment process.
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As a lender, you’ve to exercise due diligence on both new and existing customers by closely studying their credit rating, payment history, and references. This way, you eliminate risks. Lastly, it’s best to get in touch with a professional collection agency. You don’t have to just do it all on your own or be forced to go to court; a third-party collector will have a devoted team doing the job for you, allowing you to focus more on running and improving your business.
Business collections agency Brennan & Clark aids entrepreneurs in eliminating credit losses. The firm has been around for more than 30 years and is known for forming strategic alliances with its clients to formulate effective collection strategies. More on the firm and its services here.
