How to Collect Money Off People Who Owe You

How to Collect Money Off People Who Owe You
February 5, 2019 Biznostics

 

Do you have people that owe you money that should be in your bank account rather than theirs?

Many business owners are scared to chase outstanding money in case their customers say no, or that they might get angry or they are afraid if they put too much pressure on them, they may ever want to do business with you again

The reality is that you’ve done the work so you deserve to be paid. You were never designed to be a bank for your customers.

Here’s three things that can help you collect some of your outstanding money today:

1) Make it a Priority

This is all about putting time aside to collect the money. Often this is something that we know we should be doing, but we never have time for.  Start by making a list of the people that owe you money and then get started following up right away.

You’ll be surprised how just by calling people that you’ll start to collect more of your outstanding money because you’ve actually made it a priority. Just remember, if someone is getting paid ny your customer it might as well be you.

2) Be Firm and Fair

When you call be firm and fair.

Your initial call needs to include confirming that everything’s okay. Sometimes they’re not paying you because they’re not happy with part of a job or not happy with the product or service that you’ve delivered, so it’s better off sorting that out up front.

Make sure you hold them to a commitment to a time frame. For example, that they commit to pay you X dollars into your bank account by this Friday. Make sure the commitment comes from them and repeat their commitment back to them for their agreement.

And the next part is super important…

Make sure you hold them accountable to their commitment and if they have not paid by that date, make sure you follow them up on that date. Show them that you will be the squeaky wheel that will need to get oiled, that you will not go away and that you’ll be following it up. Be persisient and consistent.  A good idea is to put these times in your diary.

In each conversation take notes of what they have committed to and with each call you have you will need to escalalte the intensity.  For example, your initial call may just be a friendly check-in call and if they miss that you start to get firmer with them, and then after that, you start having demands or other notices. You escalate each time but always be firm and fair.

3) Have Payment Options

Having payment options can increase your chance of getting paid. For example, could they pay on a credit card so you got paid right away. Could you offer them a payment plan so that they could pay it off over time. A little bit each week is better than nothing at all. You may also want to check out companies who can help you do this. They’ll take on the debt. They’ll pay you money upfront, and then they’ll collect the payments off the person often at an interest rate.

So just to recap, to collect money off the people who owe you

  • Make it a priority
  • Be firm and fair
  • Consider payment options.

 

By following these steps you can put more money into your bank account and take away some of the financial and cashflow pressure.  That way you can start to focus on building and growing your business.

 

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