That’s why it is imperative for small business owners to equip themselves with methods for collecting money owed their enterprise.
According to Lindsey O’Brien, marketing brand manager with Cleveland, Ohio’s E2B Teknologies, the creator of collection software Anytime Collect, says there are steps an entrepreneur can take when seeking past-due payments.
Before entering into a contractual agreement with a vendor, especially one new to your company, O’Brien suggests checking that business’s credit history “to see if they have fallen behind with other creditors.” Assuming the vendor passes that initial test, she says it is wise to enter into a written and signed contract journalizing the agreement of involved parties.
Just like people can purchase insurance against losses stemming from fire and theft, a small business owner seeking protection from non- or late-paying vendors can buy trade credit insurance.
When a transaction has reached the point where payment is not only due, but is late, steps an entrepreneur can take include:
- Initiating pleasant phone calls reminding vendors/debtors about the debt
- Sending payment reminders
- Sending collection emails
She says certain information should be included in a payment request, such as:
- A statement indicating when the payment was actually due
- A brief summary of prior collection efforts
- An accurate mailing address where payments are to be sent
Tami Kamin Meyer is an Ohio attorney and writer who is also chair of the Marketing Committee of the American Society of Journalists and Authors.