Charming Collectors: How To Contact A Debtor About Their Outstanding Balance

One of the fundamental truths about running a business is that somewhere along the line, people are going to owe you money. The amounts and frequency of which are something that is often defined by how wise and tightly run your business practices are, but that doesn’t mean it’s always necessary your fault. Someone defaulted on their service charges, some form of incorrect bank transaction which still managed to slip through your system or a loan which hasn’t been paid can leave you in the tricky situation of wanting to collect the debt but not knowing how. 

As a business, this is one of the most important ‘small’ considerations to make. We name it a small consideration because it isn’t tied up with the daily revenue building of your firm, but it can certainly impact it. While wiping off a debt might not put you under as a business, or even dent you at all depending on your size, it doesn’t mean you should ignore it. This is money which is owed to yourself and your business, and you have a right to claim it with all of your might. 

Unfortunately, applying all of your might is sometimes not advisable, because it can lead to you losing contact with your client or forcing them into bankruptcy, something which will prevent you from claiming the debt in the first place, unless you began the long and drawn out legal battle to acquire assets from the party in question. This can be a heavy investment in itself, and it’s likely that as a small firm, the outstanding amount isn’t so large as to warrant the aggressive methods of acquiring it.

You should always be thinking of the phrase ‘amiable acquisition.’ You need to acquire the money that has been owed to you, but you need to be amiable about it when contacting the client. You need to demand the money politely yet firmly. You must dictate the terms of non-payment in your debt recovery letter, which can be expertly drafted by many specialist firms who are well versed in the art of bringing a debtor into the fold. 

However, if you don’t open with positive terms, letting the past client know that this debt is something which can be settled, and you’re willing to listen to payment plans or installments, then they have something to work with, and they won’t emotionally feel burdened by the debt. It seems too soft to use the ‘gently, gently’ approach toward someone who owes you money. It’s too easy to want to go in guns blazing with threats and aggression. Unfortunately, this can be counter productive. While the last thing in the world you’d like to do is be nice to those who think they don’t have to pay you, doing so can help you get the upper hand and secure payments out of nothing over time.

With these techniques in mind, you can be sure that your business will make a revenue stream out of your debtors, whereas once there was nothing but a financial void.