How to Handle Non-Payment from B2B Customers Effectively

Your business can’t withstand too many missed payments. After all, these payments go toward your essential overhead costs and operating expenses. Without them, your business’s cash flow and financial stability are disrupted.

It’s bad enough when these missed payments come from consumers. It’s worse when they come from business-to-business (B2B) customers. Find out why these types of non-payments are challenging to resolve and how Summit A*R can help you get the funds that you are owed.

The Common Challenges of Collecting B2B Payments

Collecting B2B payments can be a bit more complicated than collecting payments from your business’s consumers. What challenges can you expect to navigate in this situation?

The Possibility of Damaging Business Relationships

You don’t want to be too aggressive with your attempts to recoup your funds from a business customer. Doing this could permanently damage the business relationship that you spent so much time and effort building. If you overstep, the relationship could dissolve, and you could lose out on major business opportunities in the future.

The Size of Debts

Commercial debts are usually much bigger than the debts from individual consumers. The larger the debt load, the more complicated the retrieval process can be. It’s not likely that the debt will be paid at once in a single lump sum. It may need to be collected in smaller installments.

The Distraction from Core Operations

Debt collection can be time-consuming. Tackling this task could detract valuable time and resources from your regular business operations. This could lead your staff members to fall behind in their normal workload. You could lose out on more revenue trying to recoup funds that are missing.

The Laws and Regulations for Debt Collection

There are a number of laws and regulations that you need to follow when attempting debt collection. The Federal Debt Collection Practices Act (FDCPA) has parameters for debt collection practices, including when you are allowed to contact a debtor and what you can say to them. States also have laws and regulations in place. For instance, California has the law SB 1286, which protects debtors from unfair debt collection practices (this includes commercial debts).

If you aren’t familiar with the rules and regulations of the land, you could make a mistake when attempting to recoup funds from a business customer. This type of misstep could disrupt your B2B relationship, and it could result in consequences like lawsuits and regulatory penalties.

Using a Debt Collection Firm for Help

You shouldn’t try to navigate the complexities of commercial debt collection on your own. This is where Summit A*R comes to the rescue. Our professional debt collection firm provides all sorts of debt collection services for businesses that are desperate to access unpaid invoices and bounced check payments.

Our firm specializes in debt collection services in a variety of fields. If you run a dentist’s office, we can address unpaid dental bills from clients for you. If you operate a business in the healthcare field, explore medical collection services for unpaid bills. We have the expertise to meet your business’s needs.

Why Should You Use Our Debt Collection Firm?

Knowledge of Legal Parameters

We have a staff of trained debt collectors who are ready to help your business access the funds that it’s owed. Our staff members are incredibly knowledgeable about current federal and state laws regarding consumer and commercial debt collection. So, there is no risk of incurring any legal complications when contacting debtors.

Minimizing Tension Between B2B Customers

It’s better to have a third party step in for debt collection to resolve B2B payment disputes. Taking the onus of debt collection off your business will make it easier to handle financially and emotionally. You’ll feel less stressed about the collection process and less resentful toward your customer. On the other hand, your customer won’t feel as defensive when communicating with a professional debt collector.

By calling on a third party, you can minimize any tension in a sensitive situation and maintain a strong B2B relationship.

Skip Tracing Resources

Our debt collection firm will use helpful tools to manage outstanding invoices that your business won’t have on hand. For instance, we have skip-tracing resources at our disposal. If a debtor decides to “skip town” or change any of their important contact information without letting you know, our skip-tracing resources can help our staff locate them. A licensed private investigator oversees our skip-tracing department, so you can rest assured that your missing debtor will be found in a timely manner.

Compassionate Philosophy

Our firm follows the P.H.D. philosophy: “Preserve Human Dignity.” Our agents always treat debtors with respect and compassion. By treating your B2B customer with dignity, you can maintain a professional relationship long after recouping the funds that you’ve lost. A more aggressive approach will not yield the same positive results.

So, if your business customer hasn’t paid you what you’re owed, even after sending reminders and waiting patiently for an update, then you should contact our firm to find solutions for recovering commercial debts.

Effective Strategies for Preventing B2B Non-Payment

Implement the following proactive strategies to minimize the risk of non-payment from a B2B customer.

Establish Clear Payment Terms

Your business contracts and invoices should clearly establish payment deadlines, amounts and available methods. Clear terms should minimize the chance of payment disputes in the future.

Divide Large Payments

If this customer has struggled to cover payments in the past, dividing payments into smaller installments could be an actionable solution. This compromise could make it easier for them to pay what they owe you.

Send Reminders

Sometimes, a payment will slip a customer’s mind. Send them reminders about upcoming payments when the deadlines are close by. And if they miss those deadlines, send them reminders again. The reminders should be simple, straightforward and respectful.

Do not send reminders that are accusatory or aggressive, even when the customer has already missed a deadline. This approach could backfire.

Know When to Escalate

When all else fails, you can contact Summit A*R for assistance. When you’ve set clear payment terms, provided smaller installments and sent gentle reminders to a customer, they still might come up short on a payment. In this case, our debt collection firm will handle this tricky situation for you.

Non-payments from B2B customers are no easy matter to handle on your own. Get our agents to help!