How to Collect Overdue Debts from a Good Customer?

Collect Overdue Debts

So, you have got good customers who have placed significant orders in the past and may be doing so in the future, but not paying on time. When a customer does not pay on time, it results in cash flow problems, however, these are good customers who can fetch you more businesses in the future. So, how effective are you in collecting overdue payments without damaging the relationship?

Tips To Collect Overdue Debts From A Good Customer:

 

Find Out Why?

When good customers are not paying off their bills, you should spend time to find out why. Instead of threatening them or taking legal action, you must find out why and take required steps to let them make on-time payments.

Monitor Their Payment Habit:

If your payment term is 30-day and your customer always make payment in 60-days, then you should wait until their normal cycle passes. Only if he exceeds his regular payment term, you can take further steps.

Adjust The Billing Cycle:

Instead of sending the bill at the end of the month, you can send the bill mid-month. Moreover, you can also limit the order size or provide the option of cash on delivery.

Make Direct Contact:

Instead of sending bills over and over, you can make direct contact with the person and remind him about the overdue bills. Sending bills repeatedly becomes a waste of time and energy.

Create A Payment Schedule:

If the customer is having trouble in paying the debts or his financial condition is in trouble, you can create a payment schedule that will put you ahead of other creditors. This will also provide some relief to your customer, and you will earn some loyalty that might pay off in the future.

Have A Follow Up:

When a payment is past due, you can send a reminder or make a phone call to remind the customers about the unpaid bills. A timely follow-up can be a better solution for problems such as a lost invoice.

Consider Using A Debt Collection Agency:

If everything fails and the customer hesitates to make payment, it can be a good idea to use a collection firm. They will have all the possible sources to retrieve the due amount legally.

JMA Credit Control is committed to help businesses by recovering their overdue accounts and increasing their cash flow. We handle debt collections with the utmost professionalism and discretion. We treat your debtors with respect and take required action without posing any risk on you.

Call us on 1300 588 728 for a free consultation with one of our experts. We work with businesses throughout Australia and have offices located in MelbourneSydney & Brisbane.

Written by Richard Thompson

Richard Thompson is the Managing Director and owner of JMA Credit Control and has over 25 years’ of trusted experience. Richard has a wealth of knowledge in Credit Management and Debt Recovery ensuring client’s recovery bad debt quickly and cost effectively.

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