Trust is a complicated thing. For some, it is easily earned – it’s a longer process for others. In business, trust often means the difference between a mutually beneficial business relationship and a massive headache. One of the most effective ways to reduce delinquent accounts is to assess a client’s ability to pay before beginning extending your trust. But how is this done? There are many techniques and things to remember that will help draw you to trustworthy individuals and steer you away from business relationships that can jeopardize your bottom line.
Stay on the Lookout
As easy as it is to be lured into a false sense of security when meeting somebody new, it’s important to remember that a firm handshake doesn’t always translate into a firm commitment to paying bills. Avoid the pitfalls of extending trust to somebody because they “feel trustworthy” or because “your gut tells you it’s OK.” Pay close attention to a person’s behavior such as their punctuality, commitment to appointments and follow-through. These habits can help inform how committed a person may be to making payments on time and in full. If a client or customer is having a hard time keeping his word with inconsequential details, it should be a red flag that the same may be true for important matters.
Be Clear About Your Pricing
When entering into a business agreement with a client, transparency and communication are essential to ensure that the terms of the agreement are mutually understood. Keep a client updated whenever an estimate changes and make sure he or she fully understands the amount of payment you will be expecting. Diligence is required to ensure a change in price is understood by the client, as it can be easy for a busy client to brush a change under the rug only to be surprised when the bill comes.
Avoid obligating a client to agree to a service he or she can’t afford. Sales pressure may cause a person to agree to a debt that will later be skipped out on because it’s too much. If you sense hesitation or a lot of resistance when it comes to pricing, it may be a good idea to pump the brakes and make sure you’re providing what the client wants at a price he or she will pay in full.
Do a Credit Check
It may feel like a heavy-duty solution because of the paperwork involved, but a small business is putting a lot on the line with a new client – especially if it is a pricey endeavor. A credit check can reveal many things that a client with a bad history likely wouldn’t volunteer out of fear of rejection. This small step is a simple way to reduce the risk of an account becoming delinquent. There are multiple reasonably priced services easily found on the internet that offer one-time lookup fees or packages that include unlimited credit checks for a monthly fee.
Debt Collection Services
Have you had a client tell you he or she cannot afford to pay an invoice you’ve issued? If you are a business owner who needs help collecting an outstanding debt, even if you’re not in contact with the debtor, contact Abraham & Kevork LLC at 888-788-0093 to schedule a free debt assessment.
Abraham & Kevork is an Orange County-based debt collection company that operates on a “No collection, No fee” philosophy that means clients will pay cost-effective and competitive rates only when a debt is successfully collected.
