[Review] Guide To Getting Paid
The only thing worse than having no customers is having non-paying ones. And small businesses, with limited credit and cash flows, suffer from non-paying customers more than most. After all, it sucks doing a whole bunch of work and rack up a large number in your receivables column, but have your business go under because you can’t collect on them to pay off your own bills. If collecting credit is a problem that is plaguing your small business, then “The Guide to Getting Paid: Weed Out Bad Paying Customers, Collect on Past Due Balances, and Avoid Bad Debt” by Michelle Dunn is the book for you.
Author Michelle Dunn is a credit and collections expert, the founder and CEO of the American Credit and Collections Association, and has a very interesting success story. So it’s probably an understatement to say she knows something about collecting bad debt. In “The Guide to Getting Paid“, Dunn dispenses advice to help entrepreneurs and small business owners on how to collect past due balances, avoid bad debt and increase your profits.
Dunn points out that credit management is good business management, and lays out basic credit management guidelines such as setting a proper credit policy for customers, working out effective payment arrangements with delinquent customers, etc. There’s great advice on how to handle debt collection calls, and even advice on how to use – or not use – social media to research, contact and collect on customers. If you prefer to outsource this function to others, there’s also advice in here on how to work with third party collection agencies.
You may be a small business owner who has a few sales accounts who tend to abuse your leniency with credit. Or you may be a startup entrepreneur or technical founder who’s unfamiliar with working out a proper credit policy with your customers. Either way, “The Guide to Getting Paid” is for you.
Here are some bonus tips from Dunn:
Top 10 Money Mistakes made by Entrepreneurs/Small Business Owners:
- Not having customers fill out and sign a credit application at the time of sale
- Getting incomplete information at the time of the sale
- Not checking credit or references
- Not putting accounts on “hold” for future orders when there is a past due balance
- Ignoring accounts as they become more and more delinquent – hoping the person will pay
- Not having a credit plan that outlines what steps should be taken when someone becomes past due or a check is returned for NSF
- Not placing accounts with a collection agency soon enough
- Not having documentation to support or “prove” the debt when someone doesn’t pay
- Shipping more products or performing more services when an account is already past due
- Being too lenient with credit when the customer is a “friend” or family member
Daniel Goh is the founder and chief editor of Young | Upstarts, as well as an F&B entrepreneur. Daniel has a background in public relations, and is interested in issues in entrepreneurship, small business, marketing, public relations and the online space. He can be reached at daniel [at] youngupstarts [dot] com.