4 Expert Collection Strategy Tips

collection strategy

‘Hope’ is Not a Collection Strategy

Businesses don’t just ‘hope’ that sales just ‘happen’. They know that without sales, they won’t have a business, so they have a sales strategy to win business.

So why do so many owners just ‘hope’ that customers will pay? If there’s no cash, there’s no business either, but still, some don’t have a simple collection strategy for getting their invoices paid.

It seems that often, people don’t say or do anything about asking for their money back simply because they aren’t sure exactly what to say or do.

They don’t have a proven strategy for their collections. They don’t know how to make sure their invoices are paid by the due date.

Naturally, they’re frightened they’ll say or do the wrong thing and upset their valuable customers.

So they don’t say anything. And they don’t do anything. They just hope that they will get paid and cash flow suffers.

If cash flow dries up completely, the business will fail. Disaster.

That’s just what I did when I first started my business. I didn’t have a collection strategy, so I didn’t say or do anything about unpaid invoices.

When my bank account was almost empty, I learned my biggest customer couldn’t pay. I almost had to close the business in the first 12 months.

But the truth is that customers expect to pay when they place an order and, as I learnt, often it’s not because they don’t want to, but there’s a simple reason why they haven’t.

I was lucky, and my customer paid, so my business survived. But I couldn’t ever let that happen again, so I developed a simple collection strategy to make sure customers paid on time in the future.

It was so simple; our part-time administrator managed the whole process:

The Super-Simple Collection Strategy

  1. Invoice super-fast
  1. Invoice super- perfectly
  1. Show the payment due date clearly
  1. Make it super-easy for your customer to pay
  1. Make an early collection call (disguised as a service call)

Do you hope you’ll get paid on time – or do you have a proven collection strategy?

To your business success!