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Tips For Handling Customers That Make Delayed Payments

Do you have customers who never clear their invoices on time? You are not alone. There are several businesses just like yours whose invoices are not cleared on-time and remain overdue for more than 60 days. If you have too many such customers the cash flow of your business can take a hit.

Here are some useful tips from Kollecto, a leading invoice collections & B2B debt recovery Company for handling customers that make delayed payments.

Send the invoice early

  • If you know that a customer is repeatedly making delayed payments, it is best to send the invoice immediately once the product is delivered or a task is completed.
  • For faster results, it is always better to send electronic forms of invoices via. email.

Don’t delay the follow-ups

  • This is something that we at Kollecto do for several clients whose invoices have been pending for several months and even years.
  • It is important to show the customer that you care for your payment through repeated follow-ups if the payment has not come when it was supposed to.
  • At Kollecto, an Invoice Collections Company in India, we start by making a friendly call on behalf of our clients or sending gentle email reminders about the payment.
  • You need to make sure that you are not too rude or pushy since you can lose the customer.

Working out a payment plan

  • When businesses hire Kollecto for debt collection or recoveries, we first understand whether the customer is genuinely stuck somewhere and really experiencing cash flow issues or not.
  • If the customer is genuine but cannot pay the entire amount, we offer the installment option for the previous business, but ask our clients to take advance payment or at least part of it upfront for the next one.
  • For example, if a customer owes you 20,000 INR and cannot pay the entire amount upfront, he/she may be able to pay 5,000 INR every month over four months.

Make an upfront communication

If a customer is repeatedly delaying the payment when you know he/she can pay, it is best to stop doing business with them to make the customer understand the value and quality of the services or products you offer.

If you are confident about the pricing and quality of your products or services, the customer will definitely come back to you.

While handling the toughest customers for debt recovery on behalf of leading businesses and brands, Kollecto makes it a point not to lose the temper on any of our clients. We keep chasing them until they make the payment to our clients who have hired us as their debt collection company in india.

2. Benefits of Choosing a Debt Collection company

Every entrepreneur has encountered overdue accounts in his/her business. Are you facing the same problem in your business? Customers who are slow payers can have a negative impact on your business. It is observed that 80-85 percent businesses fail due to cash flow issues. You can get the cash flow in your business back on track by hiring a B2B debt recovery company such as Kollecto.

Kollecto is one of the top debt collection company India, preferred by leading businesses. Being a renowned invoice collections company in India, Kollecto offers robust debt recovery services for businesses of all sizes – small, startups, mid-sized, and large corporations.

Here are the benefits of choosing a debt collection company India.

Benefit # 1: Increase in cash flow

  • A B2B debt recovery company can help increase the cash flow in a business.
  • Lack of cash flow can be the main reason why a business is unable to grow.
  • A debt collection company India can not only help to increase the cash flow but also maintain it consistently over a period of time.

Reason # 2: Save valuable time

Debt collection is a time consuming task. Outsourcing debt collection to a professional and expert debt collection company India can help save valuable time for entrepreneurs so that they can focus on the core business goals and objectives.

 Reason # 3: Quick results

  • Hiring an expert and experienced invoice collections company in India would mean those unpaid invoices would get cleared faster.
  • It is observed that customers clear the invoices faster when a professional B2B debt recovery company is on their case.

Reason # 4: Everything is documented

  • Top debt collection agencies in India like Kollecto keep the entire process of debt collection well documented.
  • The documented records are available to businesses as a proof if they want to go to court against the customer who is not clearing the dues.
  • The documented records serve as key evidence for proving their claims.

Reason # 5: Professional advice

Since B2B debt recovery agencies like Kollecto are experts in credit management, they offer professional advice and give valuable tips to businesses to improve their financial position and identify slow paying customers right at the start.

Instead of chasing debtors, it is best to outsource debt collection to an adept debt collection company India such as Kollecto. This will help move the business towards profitable growth. 

3. Reasons to Outsource Your Debt Collection to a Professional Recovery Company 

You cannot do everything on your own in a business. You need to delegate some tasks and debt collection is one of them. Being an entrepreneur, you may have a lot of things in mind – strategy, growth, employees, revenue generation, sales, profits, and others. Why take stress about debt collections when you can outsource it to a professional debt collection company in India?

Here are the reasons to outsource your debt collection to an expert B2B debt recovery company.

Reason # 1: Maintaining the relationship with customers

  • When recovering debts, it is important not to hurt or upset your customers. Doing so may result in them switching over to your competitor.
  • Outsourcing to a debt collection company in India means experienced agents handle your clients who can sympathize with them.
  • Debt collection outsourcing to a professional invoice collections company in India will help strengthen the relationship of your business with customers.

Reason # 2: Protect your business cash flow

  • If your customers don’t clear the invoices on time or do not make the payment at all, how are you going to pay your employees, vendors, bills, and other expenses?
  • Having a poor cash flow can literally stagnate your business, and ultimately kill it. 
  • For maintaining a positive cash flow, effective debt consolidation is crucial which is done by an expert B2B debt recovery company.
  • When a debt collection company in India approaches customers for one outstanding invoice, they automatically clear the next invoice on time.

Reason # 3: Send out a clear message to customers

  • Outsourcing debt collection work to a professional B2B debt recovery company like Kollecto sends out a strong message to your customers to not take your payment for granted. 
  • It also communicates to them that delayed payments won’t be tolerated.

Reason # 4: Knowledge about debt collection regulations

  • There are several rules and laws pertaining to debt collection.
  • An ace debt collection company in India like Kollecto has adequate knowledge about all the rules and regulations related to collection of unpaid debts.

If your company is facing the problem with collections and has a lot of outstanding invoices, hiring Kollecto, a reputed invoice collections company in India is a wise decision. This will help your business to recover debt quickly, and at the same time prevent the cash flow issues from aggravating further.

4. Why is Debt Collection Important?

Running a business is a challenging task and one of the major challenges for every entrepreneur is debt collection and recovery.

  • Invoices overdue by 60+ days?
  • Uncleared invoice for more than 6 months?
  • How are you going to run the business with so much debt?

Every business owner expects customers to make payments on time, but sadly this does not happen in reality. There are customers who pay really late, while there are some who just don’t pay. Fast and successful debt recovery is what all businesses are looking at, and most probably you too.

Experienced professionals from a B2B debt recovery company can help recover your overdue balances faster from customers.

  • Why do businesses hire a professional debt collection company in India?
  • What makes debt collection so important?

Increase in payments from customers

  • Which business doesn’t like receiving payments from customers, that too when the payment is being received after being overdue for so many days?
  • Hiring a B2B debt recovery company for debt collections can suddenly result in an increase in payments from customers that have been pending for a long time.

Get rid of cash flow problems

  • In order to run seamlessly, pay employees and vendors on time, take care of other miscellaneous expenses, every business requires a smooth cash flow.
  • Lack of cash flow due to piling debts can pull a business back due to which it is unable to grow and achieve those set goals.
  • Debt collection through an invoice collections company in India can help you get those long overdue accounts settled.

Better than taking loans

  • The cash flow of every business is directly tied to the invoices it generates.
  • In case of too much outstanding debt, most business owners resort to taking loans.
  • Taking loans increases the business obligation and further reduces the cash flow of the company.
  • Hence, debt collection with the assistance of a B2B debt recovery company would mean no tension and stress of loans and new debts for the company.

If you are looking for improved cash flow and reducing the risk of losses for your business, it is a wise decision to focus on debt collections through the professional services offered by a debt collection company in India like Kollecto.

5. Things that Debt Collectors are Not Permitted to Do

Being a business owner, it is important that you get paid by customers regularly as and when the invoices are due. Cash flow is essential to keep your business running smoothly.

But, what if . . .

  • You don’t receive payments from customers on time?
  • You have outstanding invoices that haven’t been paid by customers for several weeks and months.

What do business owners do in such a scenario?

The answer for business owners in such a case is debt collection.

Debt collection can be done in-house by hiring a team or outsourcing the work to a professional debt collection company in India such as Kollecto.

However, you need to keep in mind that even an expert and experienced B2B debt recovery company like Kollecto has certain restrictions when it comes to debt collection.

Here are some of the things that a debt collection company in India is not permitted to do.

Cannot call customers at odd times

  • A debt collection company in India is not allowed to call your customers at odd hours and times.

For example, 3 am in the morning, or late at night.

  • Your customers have the complete right to ask the B2B debt recovery company to stop calling them at odd times, and only call during the working hours.

Cannot lie about their identity

  • A B2B debt recovery company must tell your customers that they are calling on your company’s behalf for debt collection.
  • A debt collection company in India cannot lie about their identity and cannot pretend to be a government company or attorney.

Cannot threaten

  • A debt collection company in India is not allowed to threaten customers.
  • You will be sued, you will be thrown into jail, your friends and family members will be told about your outstanding payments – A B2B debt recovery company is not permitted to threaten customers like this.

Cannot use foul or abusive language

  • If your customers find the invoice collections company in India speaking to them in abusive language, they can immediately seek help from an attorney.
  • A professional and experienced B2B debt recovery company like Kollecto will never use abusive language during debt collection.

A debt collection company in India has to follow certain regulations and practices when talking with customers about clearing their outstanding payments.

2nd week – 14-Jan-2022

1. Common Billing (Invoicing) Mistakes That Result in Delayed Payments

A key aspect of getting paid for the products sold or services rendered to a customer is to send an invoice. Many businesses and companies in India are guilty of making some mistakes and errors with invoicing that results in delayed payments.

Here are the common mistakes that Kollecto, a leading debt collection company in India, comes across when working with their clients. These mistakes, highlighted by a renowned B2B debt recovery company like Kollecto can help businesses to identify the gaps in invoicing and fill them up to send accurate invoices to receive the payments on time.

Mistake # 1: Not mentioning the due date

  • When making any invoice, irrespective of the amount, it is crucial for you to mention the ‘due date’ for making the payment.
  • The most ideal way to avoid any confusion and dispute at a later stage is to specify the ‘due date’ on the invoice itself.
  • For example, if you raise an invoice on the 1st of the month, and expect payment to be received within two weeks, you should mention the ‘due date’ as 14th of the same month.

Mistake # 2: Sending an invoice that is incorrect

  • Billing errors may happen due to oversight.
  • Sometimes there can be a mistake in the amount, tax calculated, tax number, party name, or any other particulars.
  • It is best to cross-check the details being entered in the invoice before sending it to the customer.

Mistake # 3: Including additional or hidden charges

If you want to charge any additional expenses or make some last-minute changes to the amount, it is best to communicate it to the customer earlier rather than including any surprise charges which he/she is unaware of.

Mistake # 4: Not mentioning the payment details

In the invoice, not mentioning the payment details like bank account number, bank name, UPI, or any third-party payment service can give a reason to the customer not to clear your dues on time.

You must specifically mention your desired payment option in the invoice with all details and also provide them an alternative payment method, if possible.

 If you want to know more useful tips in preparing invoices for faster payment from customers, you can take help from one of the best invoice collections companies in India, Kollecto.

2. Advantages and Disadvantages of filing a Lawsuit Against Late Paying Customers

You may have some or many customers who repeatedly delay paying you on-time. Many business owners take legal action by filing a lawsuit against customers who pay late or are denied to make any payment towards the invoice. 

Everything has advantages and disadvantages. Filing a lawsuit for debt recovery is no different.

Here are the advantages and disadvantages of filing a lawsuit against late paying customers.

Advantages

Damage to reputation

  • Just by hearing the word lawsuit or court, many businesses would get worried about their brand image in the market.
  • No customer would like their reputation to go down in the market. Hence, on hearing the word lawsuit they immediately clear the pending invoice.

Put customers in a state of shock

  • No customer wants to be dragged to court for non-payment of dues.
  • Receiving a letter of a legal proceeding against them is enough to put them in a state of shock.
  • Your invoice may be cleared even before you register a case against them.

Disadvantage

You may lose the customer

  • If the customer gives you good repeat business but makes payments late, filing a lawsuit or just the thought of it would do more harm than good.
  • After filing a lawsuit, the chances of losing the customer to a competitor are high.

Time consuming

  • Going to court for a debt recovery is quite time consuming considering the complex nature of the legal system.
  • It may be several years before the final verdict is announced.

High expenses

  • Going legal is a really expensive approach for unpaid invoices.
  • The legal charges and expenses will depend on the amount that your customer has not paid.
  • Considering the high expenses, it may not make any sense to actually go to court.

If you have several unpaid invoices from customers, it is best to take help from a leading debt collection company in India like Kollecto. Ask the best invoice collections company in India, and they will tell you that filing a lawsuit against a customer would be the last resort when everything else fails. A leading B2B debt recovery company like Kollecto prefers a softer approach with customers for debt recovery. This helps businesses to maintain their relationship with customers. 

3. How To Find the Best Debt Collect Company?

Is your company suffering due to bad debts? Do you find that many customers are repeatedly delaying your payments?

Be it any business that you are running, it is important to receive payments on-time so that you can pay your vendors and clear your bills too. Accumulation of debts is a vicious chain that can ultimately hit your organization hard in the long run. No matter the industry or business vertical, you need to hire a debt collection company in India. 

With the competition increasing in every business, hiring a B2B debt recovery company will help keep your accounts receivables low.

Here is how you can find the best B2B debt recovery company in India.

Find the success rate

  • Before hiring a debt collection company in India, it is best to find out whether they are doing well in the market or not.
  • For this purpose, doing a little research about their success rate will help ensure that you are going ahead with the best invoice collections company in India.
  • You can either ask the B2B debt recovery company directly for their success rate or connect with any client of the B2B debt recovery company to check their performance.
  • The success rate of a debt collection company is a direct reflection of the performance in collecting debts.

Hire someone who can understand your business

  • It is crucial to identify a B2B debt recovery company who will not only work for you, but with you to bring down the debts to as low as possible.
  • If you run a small business that caters to local customers, hiring a debt collection company that understands the local market would be the best choice.
  • The best invoice collections company in India would be someone who has worked with businesses in your industry, and helped them recover debt successfully.

Transparency

  • It is important for a debt collection company in India to be completely transparent about everything.
  • You do not want certain surprise charges or hidden fees to be included in the invoice of the B2B debt recovery company.
  • Being transparent is indispensable for long-term association with a debt collection company in India.

You may hire any B2B debt recovery company. However, the best invoice collections company in India would be the one who has the expertise and experience to handle customers from your industry. Kollecto is one such company that you can look forward to as your debt collection partner.

4. Useful Tips for Speedy Debt Recoveries

Debt recovery is essential for the growth, revenue generation, and of course cash flow for any business, small or large. Without debt recovery, a business would not function smoothly.

However, debt recovery has its own limitations. Here are the reasons why debt recovery has become a thing of concern for organizations.

  • There are several restrictions placed by the local Governments to protect customers from facing hardships during debt recoveries.
  • There is strict regulation on debt collection practices.

Considering so many rules and regulations for debt recovery, how does a business maximize and speed up debt collections?

Here are some useful tips for speedy debt recoveries by a renowned B2B debt recovery company named Kollecto. 

Segregating your customers

  • At the core of debt collections is segregating your customers based on several parameters like payment over by how many days, reason for non-payment, debts, industry, last payment date, amount due, etc.
  • Segregating customers helps to identify the top-priority ones which can be contacted earlier.
  • For this purpose, it is best to invest in a CRM tool which can give you the entire debt collection information on a single page.

Act quickly

  • When it comes to bad debtors, procrastination means more delayed payment.
  • Your accounting system should be able to flag overdue payments even by a single day.
  • It is best to give a gentle reminder call to the customer 1-2 days prior to the payment due date.
  • Many businesses make the mistake of acting late in case of bad debtors.
  • It is important to act quickly and not let the customer treat your business as an interest-free money source.

Hire a B2B debt recovery company

  • Want to make the customer realize that you are serious about chasing your debt? Employing a professional and expert debt collection company in India is the best way to do it.
  • When a B2B debt recovery company is behind customers for debt collection, they either pay immediately or agree for some settlement in installments.

When we talk about the best invoice collections company in India, Kollecto is right at the top.

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