Cash Flow Issues? 3 Debt Collection Techniques That Will Improve Your Business’ Bottom Line

Effective debt collection techniques are necessary for any business, regardless of the economic climate. Knowing how to get your customers to pay their past due debts on time will increase your cash flow. After all, running a business, you have your own debts to pay. Absent an adequate cash flow, you risk falling behind on your own obligations, which leads to problems with suppliers, and/or loss of easy credit terms with your bank or lender.

Learning how to master your debt collection techniques can mean the difference between surviving and thriving for your business.

Here are the top 3 debt collection techniques to improve your business cash flow:

1. Change Your Payment Terms

Be sure to state clearly on all your invoices and any provided quotes what your payment terms are. Many businesses permit 30-60 days before payment is due. Perhaps you should consider reducing the payment terms to 14 days, or 21 days.

Amending your terms of payment can mean the possibility of receiving your money sooner rather than later. It can also mean that an unpaid account becomes delinquent within a month. You are within your rights to start collection activities before more precious time has passed.

2. Written Statement Reminders & Follow Up Calls

Once an account becomes delinquent, you can send a reminder notice to the customer to encourage them to pay their bill. This needs to be worded gently, and carefully in your letter, since the laws regarding debt collection techniques are very specific. Sending written correspondence also means you now have a record of your attempts to collect the past due debt in case future issues come up.

You should also call the customer and remind them of their delinquent debt, and to establish an estimated time frame to effect payment. Again, be careful in your communications, choice of wording, as well as the timing of your call.

Under the Fair Debt Collection Practices Act (FDCPA), debtors are afforded certain protections. Make sure you follow these laws and guidelines, whichever methods of contact you choose.

3. Third Party Collection Agencies

Sometimes, in spite of all your efforts, some of your customers won’t pay their debts. In spite of the fact some of your customers might be experiencing financial setbacks, this doesn’t help your business if they’ve already received goods or services from you in good faith, and now are unable to pay the bill.

Conscious Business – Is Enough, Enough?

Many of you feel like you “should” hit the million-dollar mark because that’s what you see other people doing, (and we all know how over-marketed and over-hyped that is so I’ll spare you any more of that).

The truth is if a $75,000 business serves your mission, vision, purpose and expenses just fine and you are HAPPY with that, there’s no reason to grow to a million if you don’t want to. Striving for someone else’s dream only leaves you feeling exhausted, unfulfilled and “less than” who you truly are. And, that’s not what conscious entrepreneurship is about… it’s about doing what’s right for YOU, right now to fulfill your purpose and mission here on earth, and feel JOY while doing so. There is no where to “get,” it’s about the journey of your soul’s expression through your business, and your life.

Which brings me to the second part of the answer to my colleague’s “enough is enough” question. It became clear to me that “enough will be enough” when I see a change in how business is conducted in the United States and the world… where business actually becomes the way in which positive change comes about.

After all, commerce is what makes much of the world work (or not work). So, if we can make a change from the bottom-up… from small businesses just like yours to massive corporations… and truly have a unified model for conscious business to contribute to our evolution… THEN enough will be enough for me.

I’ve been telling people that I’m happily obsessed with the work I feel I’ve been called here to do for right now. Believe me, if it were up to my rational thinking mind, I wouldn’t be doing half the things I’m doing right now. I’d be spending a lot more time doing nothing; which is exactly the balancing act I’m figuring out for myself. How do I pursue the passionate mission I’ve been called to, while taking extreme care of myself?

There is so much change to occur in our world as we evolve into a new reality, that I sometimes feel like I have to keep going full steam ahead because the only time it’ll be enough is when I SEE large-scale change, (rather than destruction and constriction) when it comes to business… especially in the U.S.

But, full steam ahead doesn’t work for very long if I haven’t given myself what I need at a deep level to keep going. And, so my own journey continues as I ongoingly reflect on this question of “enough is enough.” And, I do my best to be gentle with myself as I discover how to continue on my mission of changing the face of business in the world, while keeping myself nourished, nurtured, relaxed, peaceful, joyful and happy all the while.