One of the toughest parts of running a business is collecting overdue accounts.
For most entrepreneurs, it’s completely at odds with the reasons they got into business. It can be uncomfortable, distracting, and fraught with potential for mistakes.
Despite that you’re highly motivated and invested in the money owed to you, it’s easy to become your own worst enemy when it comes to collecting debt by giving in to temptation and doing simple things wrong.
See if you recognize these seven very common mistakes that can jeopardize your company's debt collection efforts:
Whether it’s because you hate to put the heat on your customers, you find chasing debt unsavoury, or you’re busy with other priorities (and who isn’t?) you probably sit on old receivables longer than you should. Many businesses wait from 120 days to a year past the agreed-upon due date to send an account to collections. This is a dangerous and costly practice. Here is a good article that shows how rapidly the collectability of debt erodes over time. In order to minimize bad debt, you must train yourself and your people to act promptly on overdue accounts.