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7 Best Practices for Handling Collections

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Handling Collections

The dreaded task of asking for your money…

People are funny about money. Asking for payment can be fairly awkward and often uncomfortable. However, handling collections is a necessary evil in any business. Otherwise, how would you profit and pay your own bills? You simply must get paid for the services you provide.

As one of Florida’s top employment agencies, we go over the 7 best practices for handling collections. We hope you find this information helpful!

1. Be Professional

When collecting payment, it is necessary to be stern, but also act in a manner that makes your clients want to continue working with you. You are 5% more likely to get payment by being polite. We recommend using positive reinforcement, like rewarding your clients for making payments on time. You could offer a percentage off the invoice as an incentive. Of course, always thank your customers for their payment when received.

2. Maintain Communication

Maintaining healthy communication with your clients is important when handling collections. A good rapport keeps you in the forefront of their minds. Stress the importance of payment and be sure to follow up.

3. Be Consistent

Sticking to a regular payment schedule can assist your clients with getting into a routine. It may help them with budgeting since they know when to expect certain monies to come out of their account. Make sure you’re keeping up to date with invoices and accounts receivables on your end. Don’t let the task of handling collections get away from you or you could end up in the red yourself.

4. Set Clear Terms

Negotiate clear payment terms up front in your contract and honor them. Do not waiver. Make sure the terms are in writing and saved somewhere easily accessible if they need to be referenced. However, be willing to renegotiate payment terms for future invoicing, particularly if they have been reliable thus far.

5. Make It Easy

We know not everyone has the option, but try to be flexible with payment type. You want to make it as easy as possible for your customers to submit payment. Send invoices out as quickly as possible or even automate their delivery. Sending reminders can make handling collections a bit easier. Provide all documentation as back up, so the client has everything they need to submit payment in a timely fashion.

6. Create Consequences

Penalize late payment, much like a renter or landlord might do. Put the client in your shoes. Would they let their customers just not pay their bills? We don’t think so! You can refuse to service the client until you receive payment – you don’t want to continue to provide them with free business.


7. Take Legal Action

As a last resort in handling collections, you may have to take the legal route. This should only be a last-ditch effort, as it naturally causes animosity between you and the client. It could effectively end your business relationship all together. If the client refuses to pay, you may have to take them to small claims court or report them to a collections agency.


Did you enjoy our article? For more great blogs or information on how we can assist you with hiring, please visit our website. We love hearing from you as well, so be sure to connect with us on Facebook, LinkedIn, Twitter, Google+, and Instagram. Look forward to sharing our expertise with you!

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