The traders feel exhausted when ditched by bad debtors. This is a very tough situation both financially as well as mentally. Mostly, businessmen hire debt collection agency to recover bad debt. But, some of the entrepreneurs carry out business in good faith and this makes them lose the hard earned money.
We have shortlisted few simple tricks to avoid bad debt situation.
• Impose Late Fee
The first rule to figure out the possibility of bad debt is to clearly mention that late payment is subjected to the imposition of late fees. Make sure the client transfer money at the time of booking order or soon after receiving the consignment. The long delay in payment will increase the late charges according to the policy of your company.
• Make Remainder Call
Set-up a team of customer service that deals with the payments section of the organisation. In the case of small business, assign the task to follow-up the customer about due payments. Never pass things to next day especially in the case of payment delay. Make sure you send email, message or a phone call to remind the customer of non-payment of the invoice.
• Sound Strict but Calm
Non-payment by the clients defiantly makes the traders angry. Instead of showcasing your short-tempered side talk in a calm manner. Anger spoils even the simplest task. Thus, don’t talk in rude and high-pitched voice. Have a polite word with the customer and ask him/her to make the payment soon.
• Be Patient
Don’t lose patience anytime soon. Remember that payment cannot be made on the call. Thus, talk in a gentleman manner and try to avoid a clash with the consumers. As it may agitate the customer and things would go out of hand. Listen to the other party first before making your own judgment.
• Compute Unpaid Debts
Before taking the first step to call the customer, we suggest the trader to compute the total pending amount. After finishing computation, analyse the reasons that may cause the delay in payment. Such as the holidays, or festivity or any other family problem that client might be facing. Making a decision only after assessing the condition.
• Call the Customer
Nothing works better than calling the debtor personally. Give a phone call directly to the customer and ask for the time he/she requires to clear the bill. Also, make sure that the date promised to for making payment is a working day. Cross check the day is not Saturday/Sunday or any other holiday.
• Give Time to Respond
Give customer some time to reply. The client might be facing some financial crunch. Or may be dealing with some other serious issue. So, give him/her couple of days to furnish the promise made to you. But, must make a reminder call in case the deadline expires or is about to expire.
• Take A Legal Action
At last, when the client stops responding to mail, message and phone calls then take the legal course of action to fetch your money from the bad debtor.