Bad Credit Business Tips: Make Spring Your Collections Season
Small business owners with bad credit must pay close attention the the cash flows of their businesses, as not only are they vital for making payroll, obtaining supplies and financing any number of operational necessities, they also are a major factor in applying for bad credit business loan alternatives which can be important growth boosters in lieu of traditional loans. In the hustle and bustle of a typical office day, small business owners can have their attention fought over by many conflicting commitments, all equally vital to the overall health of the enterprise. However, a real danger that can potentially set a business back is pursuing sales, but slacking when it comes to the often tough work of making collections on outstanding payments. Business owners can fall behind on their collections for any number of reasons, from allowing extensions on payments, forgetting about them, to being distracted by other areas of their business that specifically demand their personal attention and expertise. Whatever the case may be, small business owners need to collect in order to keep their business running and viable in the long run, and the Spring is as good a time as any to revisit this important small business department.
Small business owners who already have bad credit can’t afford to let collections hurt them more. Especially moving into the Spring, which can mark the start of the busy season for many business owners, entrepreneurs will need as much capital as they can get in order to be ready to meet market demands, market their services, and generally stay nimble on their feet. In order to prepare for a more serious stab at the collection of past due accounts, business owners can and should create a more developed and comprehensive strategy that accounts for important factors related to their past due account holders.
Tailor your collection methods to your client relationship. Small business owners may be tempted to fire off a mass of strongly worded letters threatening legal action, perhaps even letters prepared by a lawyer to put more weight behind their threats. While this technique might yield some real results, in the case of accounts with only minor infractions it is overkill and can sour what might have been a long term relationship. That’s where the Spring cleaning aspect comes into play. Often, business owners will have a lot of sorting to do through past due accounts if they have not been properly organized. Identifying where each account falls into the spectrum of possible responses is something that can take time, but is important when it comes to getting the highest rater of responses to your collections efforts.
Take the time now to set up better processes. Using the renewed energy that comes along with the Springtime to not only catch up on collections, but find what works from your efforts and set up a longer term strategy is an excellent use of your time. While the time you mus invest into catching up and refurbishing will vary, it is important to conserve as much time in the future as possible, allowing your business to use the capital it has in an unimpeded and constructive way. With better collection strategies in place, your business will be able to get what it needs and avoid straining positive relationships.
Photo Credit to Morgan on Flickr