How to Collect Small Business Debt

Having business debt is a terrible thing. It really is never a good idea to grant credit if you are a small business, especially in the start up phase. Here's how to avoid business debt for your small business:

Step 1) TAKE CREDIT CARDS as the primary means of getting paid. Don't bill, don't allow your customers to send you a check or money in the mail. If you take credit cards, and put your customers on a payment plan, you can get paid anytime you want (as long as it concurs with the payment plan). So draw up a contract letting your customers know that you are going to be withdrawing a certain amount at a particular time of the month and have them sign it. Problem resolved before it becomes as issue.

Step 2) CUT OFF YOUR SERVICES FOR THEM. If they are not paying you for the hard work you are providing them, stop providing the service. Cut it off until the debt has been resolved.

Step 3) DO COLLECTIONS. Have someone from your office give them a call, send them an email, or make a personal visit to them to collect the debt. If all else fails....

Step 4) Call a collections agency. Collections agency will collect the debt, but it's going to cost you 30% of the total amount. Plus the debt collections company is going to want to sign you up for additional packages. This is a straightforward guide on how to collect small business debt.

If you liked this article on small business, check out another small business article of mine and one of my 100 page how to business ebooks at the following links:

http://www.ehow.com/how_5247538_draft-legal-documents-small-business.html

http://www.lulu.com/content/paperback-book/how-to-start-an-in-home-tutoring-business/7033993