Because bad debt is an anathema to the growth of any small business, this week Axis Telecoms thought we’d share a few tips to show you how to collect bad debt.
A Bad Investment
Because Axis Telecoms is an energy and telecoms supplier dedicated to providing value for money to SMEs across the UK, we know how detrimental bad debt can be to the growth prospects of a small business.
If a customer is unwilling to pay, that’s money you’ve invested that you aren’t going to get back. A small business can’t afford to be making bad investments and giving money away. When you do, you deprive the company of the vital capital it needs to stay afloat.
Five Tips to Ensure You Collect Bad Debt
However it is entirely possible to call in a bad debt, and collect the money you’re owed. Just use the following five tips to help you do so...
Write Letters of Demand: A non-threatening letter of demand, clearly outlining what a customer owes, along with past communication can work wonders. It can apply just enough pressure to persuade the customer to pay up.
Record Past Communications: To ensure you’re in a position of strength, keep a record of any past communications between and the holder of the bad debt. That way you can remind a customer what they have agreed to, so that they can’t back out of paying you the money they owe.
Contact Them Any Way You Can: Letters get lost in the mail. The customer certainly might want you to think so. That is why you need to contact them any way you can; phone, email even fax if you have to, to make sure that you collect the money you are owed.
Work Together: A customer might not be able to pay you back in full. That doesn’t mean that you won’t be able to get any of it back. Work with them and hash out an agreement so that you can recover as much of the money you are owed as possible.
Go to a Debt Management Company: If the customer won’t pay up, go to a debt management company. They have resources that you don’t, and exist specifically to help you recover bad debts.
Don’t Let Bad Debts Slide
Bad debts are too detrimental to a small business’ bottom line to let slide. Use these five tips to collect bad debt, and ensure that your company has the capital it needs to survive and thrive.