At Southwest Recovery, we believe in the power of professional debt collection agencies to help you get your past due invoices paid faster. We exist to take the burden of collecting past due debt off your staff and restore productivity to your team. The fact is that most businesses simply don’t have the resources to launch and maintain an efficient collection effort in-house. It takes a lot of time and additional resources to really make a serious push to collect. It’s better all around to leave that job to professionals like us. 

But what should you do right away when a bill becomes past due? There is a brief time period between the time a bill becomes past due and when you should refer it to collections. We recommend that no bill go beyond 90 days past due before you start a professional collections process. However, there are actions that you can take in the interim that may bring the account current before that happens. Here is what we recommend.

Automate Late Reminders

Automation is the future. However, it’s also very prevalent now and can help you in your billing and collections process. Reach out to your billing or accounting company and ask about whether they have automation options that you can implement quickly and easily. It may be simple to create a text message or email opt in for customers to receive a late payment reminder. 

If those options aren’t available, consider creating a physical or digital filing system that makes it easy to follow up on unpaid invoices. Task one of your employees with setting aside a few hours once a month to follow up with any outstanding invoices from the last 90 days. Most accounting software will allow you to filter invoices by time period and payment status. From there, the key is in the negotiation strategy.

Put Your Best Foot Forward

When an account is past due, it’s time to give customers your best. Unfortunately, some businesses take the opposite approach, which has the potential to alienate customers. Additionally, it may discourage them from referring you to friends and family. Referrals are such an excellent source of business, so the last thing you want is to cut off that resource.

When you reach out regarding a past due invoice, ask how you can help. Instead of being accusatory or stern, it’s best to engage the customer in a conversation about what may be happening on their end and asking how you can work together to resolve the issue. A business client may be waiting on a payment from their customer before they can pay you. There could be a cash flow issue, or any number of things. If you ask when the issue will be resolved, you can also follow up after that date if it remains outstanding.

Tell Them Your Next Steps

If the bill remains outstanding after several attempts to help, let the customer know what your next steps will be. When the 90 day period is coming to an end, it’s time to let them know you will be referring their account to a debt collection agency. If a customer is unaware of what that entails, just let them know that you outsource the collection of your past due invoices to another company, and they can expect to hear from them in a letter or phone call about what they should do next.

Sometimes business owners or managers have guilt about doing this, but there is no reason to feel that way. As a functioning business, it’s important that you keep cash flowing into your business. If you don’t, you won’t be able to continue to help other customers with your goods and services. A good customer, even one who lacks the means to pay you right away, should understand that.

Southwest Recovery Services Can Keep You Moving Forward

Dealing with outstanding debt for your company can drag down the whole operation. When that happens, it can feel difficult to move forward. We’re ready to help you keep moving forward with our range of debt recovery solutions. Contact us today about how to take the first step!