How to Collect Debts From Customers


Running a successful business requires more than simply offering quality products and services that customers demand. You must be able to run all aspects of the operation, including the financial side. Customers may be slow to pay the money they owe you, even when they are completely satisfied with your service. Collecting debts from customers isn’t a fun activity for any business owner, but it is a necessary task if you hope to remain financially solvent. Always be sure to check the laws governing collection practices in your state to ensure that your efforts don’t result in fines or other civil penalties.

Things You'll Need

  • Past due invoices
  • Customer contact information

Send invoices to clients. Not all customers fail to pay because they don’t have the money. Sometimes, they simply forget when the bill is due. Providing a gentle reminder can help improve your accounts receivable collection rate.

Print a list of all past due accounts. Do this on a regular basis to avoid losing track of who owes you money. The more time you allow between the due date and collection, the less chance you have of collecting money from customers.

Mail copies of unpaid invoices to customers. Try circling the unpaid amount and including a handwritten notation asking for payment. This tactic is more attention grabbing than an impersonal computer generated bill.

Locate the contact information for the customer. Collecting customer debts is often about talking to the correct person. Check your notes to determine if you need to contact a billing representative, an office manager or the company’s owner. Speaking with the incorrect person will only frustrate you and waste time.

Be clear about the reason for your call. Business owners tend to tune out sales calls and customer satisfaction calls. Make the purpose of your call known upfront and ask for payment.

Negotiate with your customer. Be flexible. If the customer wants to pay the debt, but is unable to pay the full amount right away, work out a payment schedule. Getting some of your money right away is better than getting no money at all.

Turn severely past due accounts over to a collection agency. When letters and phone calls go unanswered, consider hiring a professional to handle customer debt collection on your behalf. They keep a portion of what they collect, but you save time.

File a legal claim. Depending on the dollar amount and your state’s guidelines, you can sue the customer in small claims court.

Tips & Warnings

  • Pay attention to debt collection laws. Employing illegal or unethical collection techniques will only get you into trouble, even if you didn't know.
  • Find out if there's a problem with the product or service that keeps the customer from paying. Correct any issues to obtain payment.
  • Keep in mind that getting a judgment against your customer does not always guarantee payment.
  • Always remain calm. Screaming, cursing or threatening your customer for non-payment is unproductive. Acting like the professional you are is the best approach to debt collection.

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