Did you know that as many as 46% of small businesses in the US will fail within the first 18 months? Among the very common causes for startup business failure are lack of cash flow, marketing challenges, and costly debt. When it comes to the latter, it’s crucial to take proactive measures in ensuring your business has the resources to collect debt here in the US or abroad. That’s why a business debt collection services company is essential for your new or existing business. A qualified company like Construction Credit & Finance Group will have the knowledge and resources to collect past-due accounts, and also know what to do when they can’t collect, including lawsuits, renegotiating terms, and even bankruptcy proceedings. The bottom line is that as a business owner, you have a duty to your business and in the construction industry debts can be large.
How to Use Debt Collection to Get Paid Faster
Debt collections is often an uneasy topic for many people to talk about or contemplate. It is essential to understand how to use debt collection to get paid faster in the construction industry, because it can help your cash flow and your profit. For many businesses, the cash flow in the company can be difficult to get on track. One common strategy to help with cash flow is to use debt collection to try and get paid faster. Many people are fearful of debt collections because they see it as an aggressive means of trying to collect money from others. Debt collections, in fact, can be used as a way to get paid faster through a variety of methods. – Calling former clients and sending them polite and professional correspondence is just one way. Other formulas can be used to work with your past due clients to help making payment easier and less stressful. The job of a great collections agency is to help not to hinder.
Avoid the common mistakes
As your business grows, cash flow can become tight and at times it can be difficult to manage transactions. This is when outside firms can come in to help get your company back on track. It is important for businesses to have a good plan in place to better prepare for cash crunches. A good plan will include things like what bills need to be paid and maintaining an accurate payroll system. Financial planning may also include building a small cushion into your budget for portfolio-wide expenses.
The 5 top things you need to do:
Get it in Writing
The first thing you need to do is get your agreement in writing. Use a construction contract; it will be much easier to prove your point in court than relying on some type of verbal agreement based on a hand shake.
Secure Your Payment
Next, you need to secure your rights to be paid with some type of legal instrument. Whether it’s a construction lien on real property or a UCC on materials; it’s critical that you secure your right to be paid.
The worst thing that you can do is send bills sporadically. Your customers need to know you’re serious about getting paid and they can set their watches on the bills that they receive from you.
Limit Your Credit Risk
To the extent you can limit your exposure by limiting the credit you give, you should do that. It’s much easier to suffer a loss of $5,000 than $50,000. You need to make credit decisions based on the credit risk of the customer.
Avoid Emotional Decision Making
Leave your emotions at the door when you deal with credit issues; it makes resolving a business dispute much easier. The same applies in collecting a debt.
Do You Need a Debt Collection Agency?
Americans owe nearly $15 trillion in debt. The average American owes $38,000 in debt and wouldn’t make it for more than 3-5 months without borrowing more money. While Debt Collection Services does not always make the wrongdoer feel happy, it can be one of the best ways to get your money back from someone who owes you. To start, make sure you’ve taken the time to document whether the debt is legal or not. A debt collector will be able to help you with this.
Decide if having someone else do the work for you who are experts, rather than take it upon yourself.
Find an Agency You Can Trust
Construction Credit & Finance Group has been advising construction finance and credit professionals for over two decades. We are the # 1 authority in the United States when it comes to collecting on delinquent accounts in the construction industry.
Our focus is to ensure we treat your customers with respect and diplomacy in order to provide the necessary facts to recover the money owed to your organization.
Construction Credit & Finance Group provides a focused set of services that provide the upmost security to your receivables, ensuring that your company writes off less bad debt. By utilizing our services our company can ensure that your DSO is dramatically improved, and customers are more satisfied.
Construction Credit & Finance Group is a preferred provider for AED (Associated Equipment Distributors) for its members.