5 steps that will increase your business's cash flow

A decrease in cash flow is one of the biggest issues that most businesses, especially small businesses, and startups face. If you are facing customers who don’t pay or are late in paying the cash or credit they own to you, it is important that you take measures before it bankrupts or creates issues for your company.

Here are some steps that will help you improve your collection rate.

1. Know what you want from your customers

Before you contact your customers, you must know what you want to achieve from that call. The main goal of contacting your customer should be to establish a promise that the customer will pay. It can be now or a later date, but make sure your customer agrees to pay, offer them settlement if you so that they are encouraged to pay you better and on time.

2. Have all the information

As a business owner, you cannot afford to ruin your relationship with the customer. You have to work with them in the future too. So, firstly, talk to them and listen to them to understand why they are not paying. Also, inform them about the date on which they were supposed to pay. While contacting the customer, you must have all the documents like invoices, contracts specifying the terms, interest rate, and so on.

After you learn about the reason why they are not paying, try to provide them with other payment options or negotiate with them.

3. Document your calls

When you make the first contact with the not paying or late-paying customer, make sure you take notes and document everything that the customer says. Make sure you follow the procedure and the process while making contact with them.

When you contact the customer the second time, refer your notes from the previous call and start the conversation. Don’t start afresh, follow-up on your previous conversation.

4. Know the customer and remain calm with your tone

If you want to convince your customers to pay, you need to know them first. Find out their credit history, and if they have been a good customer or not, do they pay their bills on time and where they work and so on. All this will help you start a conversation with them, and figure what is stopping them from paying.

Also, you need to understand their situation and have empathy and work with them to come up with a solution. But don’t give up on the debt because that is your hard-earned money.

Moreover, if the customer gets upset or yells at you or get defensive, stay calm. Don’t abuse them or threaten them, otherwise, you will spoil your relationship with them.

5. Send them notice and letter of demand

If the customer’s paying period has expired, you should send them a first notice asking them to pay. Send them a second notice, and lastly a letter of demand asking for payment.

If nothing works, it is time to hire a debt collection agency that has offices both nationally and internationally. Visit our international debt recovery page for international debt collection.

Keep these tips in mind to improve your cash flow.

Jackson Gilbert is a Blogger. With his skills, he has been helping fellow marketers and brands worldwide. When not glued to his laptop, he can be found making travel plans that rarely happen.