In a small business, regular cash flow is necessary to make it run successfully. Hence, collecting money from clients is also necessary, to maintain the business structure. Being the owner of a small business, you need to maintain a record of your cash flow. At the same time, you should follow certain procedures to recover your money from the debtor. Maintaining these financial strategies, can save you from facing financial loss.
However, if you are struggling for a long period to collect the debt amount, the following steps can help you out in such situations.
Steps to receive debt easily:-
You may follow some of these discussed steps to avoid financial crises:-
ü Friendly approach – At the initial stage, it is always advisable to have a friendly approach while asking for money from the debtor. You can remind your debtor via email or phone call. Remind him or her that the due date to pay the amount has expired, and you still have not received payment. Ask them leniently on which date they will be able to pay the amount. A friendly approach is necessary, because the debtor might have forgotten the date, or have paid the amount into a wrong bank account. However, being the creditor you should maintain a record of these emails and phone calls as proof.
ü Overdue reminder – If the debtor doesn’t respond to your phone calls or your emails, try to get in touch with someone who is involved in the debtor business. Inform them about your communications, and tell them who you are. Ask the concerned to pass your message to the debtor, and in this situation, either the debtor or someone related to him or her to respond to the creditor. Hence, you can expect a return response from them as well.
ü Visit the debtor personally – You should give final call or email to the debtor for the final reminder. If the debtor still ignores your call or email, its time you visit him or her personally. This visit might help to know the reason for which the debtor is delaying the payment. Moreover, this approach also helps in creating a personal relationship that could be helpful for future payments.
ü Formal letter to demand for the amount – If your repeated approach via phone calls or emails is being ignored, you can send a letter of demand to the debtor.
ü Get in touch with a debt collector – After sending the letter you if still don’t receive any response from the debtor, it’s high time to consult with an experienced debt collector in Melbourne. A debt collector is well aware of the necessary steps that can help to entice the debtor to pay the amount.
ü Taking legal action – The debt collector will first approach the debtor by forwarding an email. If the debtor ignores this warning, legal steps will be initiated. A legal notice will be forwarded to the debtor to pay the amount on time.
During the legal proceedings you can hire a solicitor for legal guidance. The solicitor can explain you how these legal proceedings will take place, and what legal requirements you need to fulfil. However, make sure the solicitor you choose is related to debt collection in Melbourne for proficient legal guidance.
About the author:
Gita Ricca is a financial expert and has been associated with debt collection field for over 30 years. She has written many articles and blogs related to her field of interest. In this article, she discusses easy steps to collect debt in a small business. She also tells you how debt collector in Melbourne who is aware of debt collection in Melbourne can help you to collect your money.
Regular cash flow is necessary in a small business to run it successfully. However, delays in getting money from a debtor, may affect the business structure. That’s why; in this article a few easy steps have been discussed to collect the debt from the debtor.