As a small business owner, it’s all about the personal relationships. You pride yourself on building a good rapport with your clients, while providing a superior service or product they can’t get anywhere else. So when it’s been more than a month and the client still hasn’t responded to the invoice you sent, it can be a touchy situation. On the one hand, you need cash flow to keep your doors open. On the other, the thought of having to escalate this to a collection agency makes you shudder, because it runs counter to the helpful, nice-guy persona you’ve worked hard to build. So how should you contact unresponsive consumers? When a good customer goes silent, follow these steps to let them know that payment is due without undermining that great relationship.
1. Do some digging: Anyone can overlook a bill. But once the second bill is mailed and you still don’t hear anything, it’s time to flag that silent account and try to make contact. Take a deeper look at the account details. Your job at this stage is to see if you can uncover underlying problems that need addressing.
2. Establish contact: Pick up the phone and call the client. Smile, be warm and simply state the facts: The invoice was sent last month and payment for the service is now due. Then, pause and listen. If they didn’t forget to pay, you may be entering a larger discussion. In that case, listen to the client’s concerns, repeat what you heard back to the client and offer a solution.
3. Try alternative contacts: If your mailed notices have gone unanswered and you haven’t been able to reach them by phone, check the records to see if you have any alternative means of reaching the client, such as a mobile phone or email address. When leaving an email or a voicemail, don’t launch into specific details. Someone else who uses the account could be reading or listening and that could be an invasion of privacy.
4. Step up the number of contacts: If mailed notices, the phone call and other means of contact haven’t worked, increase the frequency of your attempts to reach the client. It’s best to try a combination of methods — alternate between mailed notices, phone calls, and emails. Of course, check your contract with your customers before calling or emailing, just to make sure you’re allowed to reach out that way.
5. The final stretch: If the unpaid invoice is 60-90 days or older, it’s time to turn to a collection partner. However, it’s important to do all you can to avoid “surprising” the client. At least 15 days before it goes to collections, be sure and state in the mailed notices that the account will be handled by your collection partner if payment does not arrive by a specific date. Be sure and include the amount due and all the info they need to re-establish contact.
Collection agencies are not just for larger firms. IC System’s foundation is in small- to medium-sized businesses, and we can help whether collections is needed on an ongoing basis or just for that occasional bad debt.
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