Michelle Dunn is an award winning author and columnist frequently featured in the Wall Street Journal, CNN and Forbes. She has over 24 years experience in credit and debt collection. Her newest book, "The Guide to Getting Paid, Weed Out Bad Paying Customers, Collect on Past Due Balances and Avoid Bad Debt”, was just released by Wiley Publishing and is now available on Amazon.
How big a problem is debt collection for small businesses, including writers?
Debt collection has always been a problem for small business owners but due to the economy it has become an even bigger problem that is even harder to solve.
Small business owners go into business because they are good at a particular thing, and that is what their business is usually based upon. Most small business owners are not experienced in debt collection and so when it comes up – they have a problem. A problem they don’t know how to avoid, a problem that they don’t realize is preventable and a problem they want to ignore and hope that goes away.
How do you collect the money that is owed to you?
The most effective way to collect any money that is owed to you is to make a personal visit to the person who owes you the money and ask for it. Most business owners do not want to do this – and so I offer the second most effective way to get paid, which is making a phone call.
My advice when someone owes you money:
1. Visit them and ask for it.
2. Start buying your morning coffee where they get theirs – and say good morning.
3. Call them
4. Call them again
5. Keep calling them
6. Send a collection letter
7. Put their account on hold
8. Report the debt to a credit bureau
9. Revoke their credit
10. Send a final notice in a flat rate priority mail envelope
11. Take them to court
What are the most effective/least effective tactics?
Putting an account on hold
Collection letters sent in non-traditional ways
Offering solutions to continue having a relationship while getting paid
Ignoring the account and hoping they will pay
Not calling because you don’t want to make them mad
Not having a signed credit application
Not having specific payment terms that the customer is aware of
Not contacting the customer
Accepting their excuses and still not getting paid
These are very helpful suggestions, thank you Michelle. I understand in addition to writing and marketing your books, you are a self syndicated columnist for 10 newspapers and publications as well as an Editorial Advisor for "Collector Mentor" magazine. How can we learn more?
You can reach me online at MichelleDunn.com and Credit-and-Collections.com.
I'm offering a free e-book to your readers for a limited time. It is called "Effective Collections: A Proactive Approach to Credit Management". You can check it out and download a copy here.. You can find my new book on my web site and on Amazon.