I have a commercial cleaning company and I've noticed that my number of delinquent accounts is getting larger and I don't have the time to follow-up on them. When I have tried calling, they keep stringing me along and promising to pay. I want to retain my client but also need to have my invoices paid. Can someone help me out?
How Do I Recover My Money?
1. Target largest unpaid balances, set up meetings to recover. Make sure you can prove your paperwork is right. Talk to a manager, not a junior person. Be ready to offer a 10% discount to clear the debt.
2. Implement new rules - where those accounts use p-cards or credit cards, move them over to payment by card at time of pick up/delivery. No more purchases on account. P-card purchases save time for larger businesses AP departments.
3. Other bad paying accounts- no more credit. Next load they want cleaned will be cleaned only after they pay past due invoices. Hold their items until they pay. They may walk away, let them.
Remember, no point in keeping a customer that does not pay. If you have a 40% gross margin, then every $1000 in unpaid bills means you need to sell another $2500 to compensate for that unpaid bill.
Finally, hire someone to help you track slow payers and act on them quicker. Or make sure you find time every week to do this- every week!
I had this problem earlier this year and ended up using a debt recovery firm.
A few suggestions they gave me to prevent future delinquencies:
-Like the Len the gent above mentions, set up meetings to recover on the unpaid balances. Don't focus on small piddly money, focus on the big accounts.
-Only give so many warnings and attempts at payment. After about 2-3 times asking for payment a meeting needs to happen or it needs to be taken to court, strong demand letter, taken to collections, etc.
You can engage in small claims court, however, debt recovery via 3rd party is the easier, softer way. One of my buddies owns a debt recovery firm, feel free to give him a shot at one of your nastier, more belligerent claims like the one I had.
You can also message me for more information or shoot me an email at [email protected]