A big part of owning and operating a small business is maintaining a positive flow of cash and ensuring invoices are paid on time. Sometimes, it is easier and more cost effective to outsource this process, which is why small business debt collection agencies are becoming increasingly popular. These agencies provide a service to recover outstanding debts from clients, and allow the business owner to focus on more important aspects of their business.
Small business owners can take steps to ensure customers pay their invoices in a timely manner. These steps could include clearly discussing the terms of payment before making a sale and including the payment terms on the invoice. It is also a good idea to provide multiple payment options such as credit card, direct debit and even cash to make it as easy as possible for your client to pay.
The debt collection process used by these agencies can be made more effective when they listen to and understand the debtors. Often there is a legitimate reason as to why a debt remains outstanding. These reasons could include a sudden loss of income, family emergency, or simply forgetting to make a payment. In these cases, the debt is most likely to be easily recovered.
If a debt cannot be repaid by the debtor in full in one lump sum, it is common practice for debt collectors to create a payment plan for the debtor.
A payment plan allows the debt to be repaid in an agreed number of weekly or fortnightly repayments. This allows the cost to be spread over a number of pay cycles, and can be easier for the debtor to manage.