Time To Collect

Steve wants to know about the best way to collect money that is owed to his small business from his customers. Dave has some great philosophies about it.

QUESTION: Steve has a small business in Atlanta dealing with high-dollar houses. Many times people won’t pay and they have to stop helping them. Is there a way that small businesses can report to an agency to collect debt?

ANSWER: Virtually every small business person runs into problems with this. Collecting is not a customer problem, it’s a sales problem on our part. When I sell advertising for my radio show and then have trouble collecting, I sold the account improperly or I won’t have any trouble collecting.

What is a properly sold account? It means the account was sold to a qualified customer who had the money, and that we have set the relationship up in such a way that they know that paying me is a very important part of the relationship. We sit down with advertisers and tell them we will bill them on the 25th of the month and expect to be paid within 5 days. If you don’t pay by the first of the month, we’ll call you. If you don’t respond to the call by the 15th, you don’t advertise with us anymore. We tell them that on the front end. Also, if dot com is in the title of their business, they prepay.

If you want to spend $300 and get some automated clearing house software, you can do a bank draft on your client’s bank account and be done with it.