10 Mar A B2B Businesses Proactive Approach for Successful Debt Recovery
Collecting past-debts is necessary in any b2b business, but most of the b2b businesses facing this as a common challenge due to non-payment of customers. Tracking down unpaid debts is yet another task that should be applied to a long list. And it’s no wonder businesses may ignore too many past due accounts after a significant period of time has elapsed. However, by taking a positive approach, debt recovery is almost possible. When it comes to chasing off unpaid B2B payments, you need to follow the proactive approach that has been explained below.
1. Mitigating the Risk
The fact of the matter is that following a constructive approach mitigates the possibility of non-payment. Business owners who neglect enforcing past due accounts reduce collection chances. The curve is exponential and so it is important to proactively seek debt recovery.
So how do business owners of B2B employ predictors to make debt pursuance more efficient and successful? Collection of debts needs to be a top priority. So it’s important to know where to start.
2. Money Upfront
It will be difficult for some B2B company owners to ask for payment upfront. Requesting payment before goods or services are supplied is not always the stipulation. Nonetheless, requesting a deposit is a possibility, particularly for larger orders. Requesting a down payment clearly sends a key message to the customer. This may be adequate to receive the remaining amount due on time.
3. Having a Clear Policy for Debt Collection is a Must
Another problem faced by most of the B2B businesses is that there is often no dedicated debt collection department. Since nobody wants making a debt collection call, it is common for procrastination and delay to occur. In the meantime, the account is continuing to go further and further past due. Hence, a clear policy on debt collection is a must.
For this purpose, a business needs to set up a strict system for who is going to make the calls, and at what point. There must be a process outlined, which involves contacting the non-paying customer through specified methods and at specified times only by adhering to the proper guidelines.
4. Ask for Payment in 7 Days
Most companies have to pay within 30 days. The problem is, the customers aren’t silly. They will figure out this implicit grace period and withhold payment as long as they can. It’s so common that it even has its own name and is called Payment Timing Optimization. So, make your terms 7 days, since most of the communications and payment transactions are electronic these days, so it is quite reasonable for any company to do so.
5. Utilizing B2B Payments Fintech
Modern technology has a key role to play in proactive debt collection. B2B payments fintech is now out there, allowing companies to harness the power of machine learning. The company is collecting data from the previous financial activity of the customer. Doing this helps the company determine whether or not it is likely to make a payment. . When a company identifies individuals who are most likely to pay, it can put in place the right proactive approach.
When considering b2b fintech payments, it is important to consider the payment process. Are B2B customers only able to use cash or cash checks for payment? If so, it will come as no surprise that payments are not made on a regular basis. Facilitating timely and convenient payments is a key to success. By adopting the latest state-of-the-art B2B payment solutions, business owners can simplify and streamline their debt collection process. By setting up an IVR telephone payment system and a web portal, making payments is made simpler and easier. Customers can use their preferred payment methods and pay for them at a time. As a result, the collection of debts becomes simpler, faster and more efficient.
At Kenstone Capital, we offer a proactive approach in providing our clients with non-contentious solutions through our friendly debt collection services. We keep your cash flow by offering reliable and fully compliant solutions to B2B businesses.