A golden rule in business is to collect any money that’s owed, and do it fast. It’s important for business owners to have robust collection practices in place, and the skills to handle people who owe them money, so that their cash flow remains positive as well as their relationships with their clients.
As with most things, prevention’s better than a cure. The better a business’s processes for handling debt, the less likely it is they’ll have to chase up debtors. This means not letting debt get too old – the longer it’s left, the harder it’ll be to chase up. It’s also a good idea to avoid large debts – getting clients to pay in instalments is preferable to one large debt. And conducting thorough credit checks on new clients is an absolute must. If a business owner can look at their history and see that it’s less than favorable, they’ll save themselves a lot of trouble down the line.
Small business owners often find chasing money owed to them like pulling teeth. Itâ€™s not pleasant and itâ€™s not the reason they went into business. But when people owe money, and itâ€™s the lifeblood of a business, then they can’t afford to not take action. Customers will respect them for being firm but fair.
Read the full article at: www.inc.com