July 27, 2019
Failure to Collect Debts Could be the Downfall of Your Business
Your business depends on a lot of things to succeed. You need to focus on marketing the products you sell so that many people will think about buying them. You also need to think about looking for more investors so you can pursue the other plans for your business. An aspect that you might fail to consider is debt collection. When someone doesn’t pay for the products or services, it’s a problem. You allowed credit payment because you wanted to increase the number of people who would purchase what you offer. The problem is when they do not pay on time.
There’s nothing wrong with allowing non-cash transactions. As long as you let the other party sign a document to pay you on time, and you’re confident about the person you are dealing with, you can pursue such transactions. However, when it’s time to repay the loans, you need to be aggressive in collecting the money.
It doesn’t matter if you’re going to break relationships because of debt collection. The fact that the person who owed you money didn’t pay you on time shows that there’s an intent to break your relationship. Your aggressive collective method is a response to the irresponsibility of the other party. If you let such debts slide, before you know it, you will be losing more money than you are making.
You have to check both assets and liabilities
It’s not enough for your business to have lots of assets and high profits. Even if your company is doing well, it could end up getting offset by the liabilities. Although technically the money owed to you is a part of the assets, it’s still a liability since you don’t actually have it. There’s also no guarantee that you will have it any time soon. If the amount you are yet to collect is higher than what you have on hand, you might have a hard time running the business.
Partner with debt collection agencies
Don’t send the message that you’re okay with delayed payments. If other individuals or business entities know about how you run your company, they might also do the same thing. You want to expand your network, but it doesn’t mean you have to relax your debt collection method.
You can choose to work with a debt recovery agency if you need help from experts. When it comes to forceful debt collection, these agents know what to do. They have varied approaches for asking the other party to pay you. Even if the person who owes you money runs from you, the agency will find a way to track the location of the person and settle the amount due to you.
You need to mean business at all levels. Don’t allow anything to prevent you from collecting outstanding debts. You might even have to opt for cash payments in the future if you have a hard time asking for the repayment of debts.