Why you need to rethink your debt collection strategy…
You’ve probably realised it already, but the bills you send out, and possibly the bills you’re meant to be paying are going unattended well past 90 days. A recent study revealed a 20 percent increase in unpaid bills amongst Australian businesses for the December 2011 quarter in comparison to the same time in 2010.
For small business, the 20% increase in unpaid bills represents a $1 million short fall in revenue each quarter. And is causing many (in my experience) to seriously reconsider where they put their money, the suppliers they keep, and inevitably the priority they place on bills they receive – and thus the cycle starts over again.
Now if you thought that was bad, spare a thought for those in the finance, insurance, and real estate sectors who currently give themselves a 50/50 shot of being paid after 90 days.
Debt Collection Strategy
I’ve been lucky enough to come across a ‘soft’ debt collection strategy. I call the strategy ‘soft’ because it is light hearted in its approach, whereby a literal piece of string and three letter series is used as the reminder to pay.
In my opinion, the ‘soft’ approach makes the process that much easer for you as the creditor and for your debtors because of its non-threatening nature. In saying that, the letters have enough weight to let your debtors know you are serious about wanting them to pay you. See below for instant access to the debt collection letters…
- Download/read the debt collection letter template. It’s a light hearted but effective strategy that is FREE for you to access. We’ve seen it pull good numbers on unpaid accounts so please reconsider they way in which you collect on unpaid bills.
- I encourage you to not stop/cut your marketing spend in 2012. Advertising and marketing is the oxygen in your business. If stop it, you die. Without new customers your business will stop bringing in new dollars to replace those who leave or add to those who stay. So don’t stop promoting your business!
If you need help implementing any of the strategies in this article, call my office on 61 3 5338 1234. Its absolutely free to get in touch with a qualified Business Coach, and I urge you to consider the possibilities in your business.
Statistics based on Inside Retail article, Businesses Taking Longer to Pay Bills