More than ever, this old Russian proverb rings true, “Don’t worry if you borrow, only if you lend.”  A sure sign that the economy is slowing down to a crawl is the horror stories of collecting payment—from personal loans to friends to payment  from companies.  This is painfully true with small businesses that depend on their relatively small client bases.  Most home-based businesses or even small-to-medium sized companies experience tales of “late payment” syndrome that could even stretch for months, due to the economic downturn.  Repeated calls to clients are never returned or the checks received from them come back with big bold letters saying, “no sufficient funds”.  Unfortunately, only a few small businesses have the cash cushion to survive client who turns deadbeat.

Sometimes, employees are better off paying dues and debts.  For one, if they have cash emergencies, they could easily get fast cash loans to deal with their dues.  But this is not the case for business and companies.Without using scare tactics or threats, one could collect from erring clients in other effective strategies.  There is also no need to hire a collections agency to do the dirty work, since this is also another added expense for the struggling, small business owner.Rather than severing the relationship with the client, there are many collection strategies that could be used.

The most common problem companies face during collection season is the client does not answer calls or reply to emails.  In this situation, the business owners must first check their records to see if the client has payment problems in the past, because this tells a lot.  The next step is to confirm if the client or customer did not go into hiding, or if the client is also a business, if it still exists.  One could make a confirmation in different ways: going online to see if the client’s website is being updated or send a certified letter to check if the client is receiving mail.

Bad checks are serious problems most businesses face.   Business owners know too well that a check that bounces or is drawn on a closed account can wreck havoc to their own payables.  To avoid this bad situation from happening, small business owners should make billing calls to new clients before their first payments are up.  This is to make sure that all invoices are in order and no problems regarding delivery.

Small business owners and companies would experience these problems in collecting payments from clients and customers.  The message that should be emphasized to delinquent clients is this: “Collections is not easy but necessary.This business relationship of ours is important.”

Tagged as: Added Expense, Bold Letters, Business Owners, Cash Cushion, Collecting Debts, collecting payments, Collection Strategies, collections, Collections Agency, Dirty Work, Economic Downturn, Emergencies, fast cash loans, Home Based Businesses, Horror Stories, Medium Sized Companies, Paying Dues, Personal Loans, Russian Proverb, Scare Tactics, Small Business Owner, Small Businesses