How to Successfully Collect Debts – 4 Effective Techniques

Are you a creditor struggling to get your debts collected; or have your clients make their payments as their terms state; and you're looking for tips to successfully collect debts?

If so, you are likely feeling quite anxious and stressed, as a large part of your business as a creditor relies on the debt repayments made by your debtors. You are not alone in this stress.

Clients can, on occasion, be unreliable or have their lives filled up to a point that they simply forget to make their debt payments as they should.

Either way, this can be a real nuisance for you as a creditor and, with all the factors you have to consider, you may not even know where to start.

This is why it is so important that you are informed about some key tips and techniques that you can use to successfully collect debts from your clients.

In this article, our professional debt collectors will discuss 5 effective techniques you can use to get your clients to pay up and how using these methods can help your business greatly.

Successfully Collect Debts by Prioritising

One great technique that you can use in your business to more effectively collect debts from your clients is by prioritising your debts and the recovery of them.

This tip may seem a little obvious. Of course, you have to put extra effort into your debts if you wish to collect them!

Well, this tip is not always put into action in business. As an owner, it is very easy for you to be juggling a lot of different business aspects and areas and it can be difficult for you to focus on just the one.

This is because, no matter what you choose to focus on, every other factor will not simply disappear so that you have no distraction from that goal!

This is when balance and time management come into play. By planning a schedule and putting in the extra hours and such into your business for a while, you can see a lot of difference in your goals which, in this circumstance, are to improve upon your debt collection rates.

However, you can find the time, prioritising your debt collection for a while can really pay off both in the present and the future!

Be Clear with Payment your Terms

Another great technique that you can use to increase the success rates of your debt collection attempts in your business is by making sure that you are 100% clear with customers on the payment terms from day one.

Creditors aren’t always known to be the most upfront and direct people when it comes to payment terms.

Stereotypes can suggest that they can, on occasion, be a little shady when it comes time to discuss the payment terms of an arrangement with a client.

Don’t be this kind of creditor. Not only for the sake of breaking down stereotypes but being secretive or simply not upfront with payment terms when you are initially signing contracts and such with clients is not particularly effective in achieving what you are looking for from an arrangement.

When you fail to inform clients of the terms of payment, chances are that one of two things will happen; they won’t be able to pay you back as discussed and declare insolvency or they will spread the word that you are not to be trusted.

Telling customers exactly how they should go about making payments and other important terms can ensure that both of you know what’s happening and that you actually receive the money from the debt.

Successfully Collect Debts by Contacting Your Debtors

Another great technique that you can use to increase the success rates of your debt collection attempts in your business is to consistently keep in contact with your debtors.

Every now and then, a debtor will have some big event or a large collection of small events come up in their life.

When one is overwhelmed, they tend to forget about commitments or, in this case, their debts.

On the other hand, debtors may fail to make payments in the hope that you won’t bother following up and they won’t have to pay or can do so at whatever time they please. 

In either circumstance, consistently contacting your debtors, especially when they fail to make payments, can be incredibly effective.

Contacting an unpaying debtor can have multiple results, any of which will be predominately in your favour. It may remind your client that they have a debt to pay to you, and they may then proceed to do so.

It may also make your client realise that they do indeed have to pay their debt and you won’t just drop it or forget about it. It may also initiate a conversation that they have been avoiding having with you, such as discussing their inability to pay debts.

Even if payments are reasonably good and there aren’t any issues, contacting clients can build a strong professional relationship, in which they feel comfortable enough to let you know if they cannot afford to keep paying their debt!

Successfully Collect Debts by Negotiating

Another great technique that you can use to increase the success rates of your debt collection attempts in your business is to negotiate when necessary.

Negotiation is a great way to continue to receive consistent payments from clients that are no longer in a financial position to make payments as they did previously. 

Although not having to negotiate and being paid as you agreed upon is the best circumstance for you, your main goal with debtors should be to receive all of the money they owe you.

If they can’t continue to make payments, they may declare insolvency or bankruptcy, which may mean that you don’t receive any of the debt at all! negotiation can be extremely helpful to your business and may mean the difference between payment and no payment!

Consider Debt Collection

Have you tried to implement new strategies to get clients to pay but are still yet to receive payment? Or are you simply looking for a simpler way to collect debts from your clients?

In either circumstance, it may be wise for you to begin to consider using a debt collection agency.

Debt collectors are professionals in the field of debt recovery and can, therefore, implement strategies and tools that make the debt collection process much more successful.

They can also carry out other important debt-related tasks, such as locating missing or hiding debtors through a process called skip tracing!

Consider debt collection today; your finances won’t be sorry.

Do you have unpaid business invoices or debts to collect?