There is much debate over the value of social media for small business owners, and although it can be debated for hours, the fact is that social media can be incredibly useful to small businesses, even in the most unexpected ways. For example? Receivables Management. Yes, you heard us correctly. There are two ways that you, in extending credit to your customers, can maximize the efficiency of collecting past due accounts by using social media.
Receivables Management: Employing Social Media to Optimize Collections
TRICK #1: The best way to approach receivables management is to prevent past due accounts from even happening. Be PROACTIVE as a creditor. Remind yourself, being proactive, in the beginning, will save you an immense amount of time and money that you would eventually be spending on collection efforts and even collection agency fees. How do you utilize social media initially? Well, for starters, when beginning your receivables management, use information found on the various social media mediums to define the credit you will be extending to a customer. How? You verify important information about this potential customer, which can help you determine the risk involved in extending them credit. Utilize these details in your decision making process:
- - Validate the business, and that all information they present appears accurate.
- - Learn about the principals of the company and the reputation they seem to present. Are they constantly disputing customer complaints over Twitter? Are people writing negative feedback all over their Facebook timeline?
- - Use the networks to research the company’s history. You can discover how long they’ve been in business and also discover major shifts in the company, etc.
- - Use your time on their social media outlets to really understand who your customer is, what their business is and what service or product they are offering. In receivables management, the more you can know about your customer, the better decisions you will make in regards to extending them credit.
TRICK #2: However, as you know in receivables management, it’s easy to find yourself in a position where you have already extended credit to customers, they have a past due account, and you’re trying to explore methods to get them paying, without having to send them to a collection agency. Use their social media to get information that can help you collect, including locating the actual customer. This works, for example, if you have a customer who claims they’re out of the country and will pay later. You can actually use their social media to verify this location. Where to begin? Research information about the company itself: their site, blog, Twitter, Facebook, LinkedIn, etc. See if there has been a sudden lack of posting,or a sudden uproar of angry customers. This could be a sign that their company is in real trouble. If you can’t get a hold of the principal or business owner, try to see if they have any social media profiles, and from those profiles if you can gather any information: Are they on a family vacation? Was there a recent death in the family? There are many understanding excuses with late paying accounts, such as a sudden death in the family causes the business owner to be distracted from his work obligations for a time period. Social media introduces a personal side of the business, and you are able to utilize it to see what kind of payment condition your customers are in. Are they simply ignoring your efforts? Or is there a deeper problem?
Social media reveals colors of companies no other form of research can. Granted, not all companies and people take advantage of social media. However, still check to see if your customers do and if so, familiarize yourself with their sites. In receivables management, this will help you make the most informed decisions when first extending credit, and then when in pursuit of a past due account.