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How to collect money from people who owe you

There may be moments in your life where you have to call in your debts. Here are steps to ensure that you ultimately get paid.

25 August 2021 · Joshua White

How to collect money from people who owe you

There may be moments in your life where you have to call in your debts. If you own a small business, for example, there’s a good chance that you’ll have to confront a customer or client about a payment that’s overdue.

Charl Viljoen, director at Plus Executive Accounting Services, says, “The most immediate way to resolve a cashflow crisis is to call your debtors. But, let’s be honest, no one likes making those phone calls.”

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Steps to calling in your debts

Viljoen shares three steps that will help you avoid potential awkwardness and ensure that you ultimately get paid. 

  1. Be prepared

Before you make the call, make sure that you have all the relevant information at hand. This will include contact names, the amount outstanding, the reason for the payment, the date of the last payment, and the number of times you’ve tried to collect the debt (if you have). Write this down and, if possible, memorise it before you call.

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  1. Stay calm

This won’t be the easiest phone call you’ll ever make. It can be hard to initiate a conversation about debts being owed. The trick is to keep calm throughout the process. Now that you’ve properly prepared yourself, this shouldn’t be too difficult.

Viljoen states, “When you make the call, identify yourself and confirm you’re speaking to the right person. If no one answers, leave a message but don’t reveal that the call is about an outstanding account.”

If you do get through to the right person, Viljoen advises that you act professionally. “Be a good listener. Don’t argue, judge or moralise, but stay firm in your quest to recover the outstanding payment.” 

  1. Make a payment plan

After establishing that payment is overdue, ask for payment in full. Be certain that you get confirmation as to when this payment will be made, and get it in writing, either via letter or email.

If the other party is unable to pay in full just yet, then set up a payment plan. Viljoen suggests splitting the payment into two amounts, each with a specific due date. Another idea would be to suggest weekly or bi-monthly payments.

READ MORE: Small business owner? This is how to be tax compliant.

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