Yet through obstacles like these, you gain valuable learnings and insights into consumer behaviour, your market, and business in general.
One area where you may run into hurdles is during debt recovery.
Healthy cash flow is instrumental to running a successful business, with the power to turn a struggling operation into a happy one.
In this blog, we explore some of the biggest obstacles that businesses run into during debt recovery.
Small businesses are known for moving quickly to try and hit the ground running. Often this comes at the expense of critical details, such as setting up a clear and streamlined way of doing things that everyone in the organisation can follow.
Taking the time to create internal processes and communicate these clearly with your team will ensure everyone is singing from the same song sheet.
It is also important to build and clearly communicate your external policies with customers, such as payment terms and cancellation policies so that there are no gaps in the system and everyone is clear and happy with the arrangement.
What you can do about it?
Another common small business debt recovery problem is not having the time to follow up debts, despite the best intentions.
It can be easy to procrastinate because you are either too busy or would honestly rather be doing something other than chasing your customers for debt collection. The days and hours after a debt falls overdue are critical.
We should also remember that trying to do everything yourself is often not the most productive use of your time. If you are not adequately resourced for prompt debt collection, now is the time to sort it out
What you can do about it?
It can be uncomfortable having tricky conversations, especially if it’s not part of your everyday practise. There is also the added worry of potentially damaging relationships and losing rapport with your customers, which many find a challenge of debt collection.
It is also common within small business to lack experience in conflict management or not be fluent in the type of language to use. Many of our small debt collection clients describe the feeling of having ‘put their foot in it’ when it comes to their debt recovery conversations and have felt relieved once they have handed over the problem to EC Credit Control’s team to navigate.
What you can do about it?
The reality is that your customers and their businesses may be declared insolvent without much warning. While customer bankruptcy is not an everyday occurrence, it is especially relevant to consider in the context of today’s COVID-19 pandemic and economic environment and can be particularly painful if you have customers with large balances owing.
Whatever the reasons small business fail, if this has happened you will want to ensure your chance of debt recovery is as strong as possible.
What you can do about it?
If your business sells to a large number of customers and offers them credit terms, often the sheer scale of your customer base can be the biggest debt collection challenge your small business faces.
With more people to follow up, it can become really hard work to reconcile your payments and keep track of all the outstanding debts. In our experience, this often results in customers and invoices slipping between the cracks, either by forgetting to firstly invoice them or failing to realise they have fallen behind and following up.
Whether you run an accountancy practice or a lawnmowing business, you are going to want to effectively manage each customer on your books with care.
What you can do about it?
Having robust Terms & Conditions of Trade is really important. With a free consultation, we will:
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EXCELLENT Based on 164 reviews Rowan Meade10 March 2025Trustindex verifies that the original source of the review is Google. Shona at EC Credit Control was excellent. She gave me fantastic advice, and was great at communicating with me quickly. Highly recommend their services if you need someone to collect a debt for your business. Mr Lift Accounts10 March 2025Trustindex verifies that the original source of the review is Google. Fantastic professional service I highly recommend G J7 March 2025Trustindex verifies that the original source of the review is Google. Great company to deal with Keith Tarsau19 February 2025Trustindex verifies that the original source of the review is Google. Great team, great communication and great results. Thank you so much for your help! Issy Lu13 February 2025Trustindex verifies that the original source of the review is Google. We are fortunate to have Toni as our credit consultant. He is exceptionally professional, patient, and consistently takes the time to explain complex concepts in a clear and understandable way. His support has been invaluable to our team. Carl Barakat16 January 2025Trustindex verifies that the original source of the review is Google. Great to work with, makes everything super clear and easy to implement Vinu Deodas17 December 2024Trustindex verifies that the original source of the review is Google. easily available and acceptable level of communication which is hard these days. Precision Profile26 November 2024Trustindex verifies that the original source of the review is Google. EC Credit Control has been excellent, and Colin has been super helpful in tuning our Terms of Trade to suit our business. We could not have done it without him! J.D. Pretorius14 November 2024Trustindex verifies that the original source of the review is Google. Thank you for great service and amazing support.Verified by TrustindexTrustindex verified badge is the Universal Symbol of Trust. Only the greatest companies can get the verified badge who has a review score above 4.5, based on customer reviews over the past 12 months. Read more
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