The top five ways to get small debts paid

Small balance debts – the bane of our collective existence. Annoying and frustrating in equal measure, and while they won’t break the bank, you still want your money. A $250 here, $179 there, $354 there, these small debts all add up. The problem is the customer knows they are only small and assumes you aren’t going to do anything about them.

Debts under $500 are a huge problem for businesses, big and small. They add up very quickly and suddenly you are owed $5000 by 15 different customers. That’s 15 different conversations you need to have, potentially dealing with 15 different issues. It is no wonder people often find it is easier to write them off rather than chase them.

It need not be this way though. You just need to approach the debt and the customer differently.

Here are our top five ways to get paid small debts:

1. Treat the debt like it is 10 times the amount it is

It is all in the mind. Be as diligent and thorough as you normally would. Complacency is a killer and often, you become lax and lazy when discussingpayment terms with the customer before the debt has even been incurred. You must be hyper-vigilant in ensuring the customer knows how much it will be and when you expect to be paid. Prevention is always better than cure, even more so with small balances.

2. Jump on them the moment they fall overdue

Call the customer that day, email them, sms them, whatever you do, don’t get lazy or just assume the customer will pay because it is “only” $218. They won’t, and if you are lazy then they will follow your lead and be lazy too. Do not let this happen.

3. Use reverse psychology

This is very powerful and a great way to motivate the customer to pay. Say something like, “Look, I know this is only a small balance, so if you have no intentions of paying it, please just tell me now so I can stop wasting my time.” They will never admit to your face that they are not going to pay, and will do anything possible to win back your belief in them.

4. Stress the consequences of non-payment

Legal action is always an option, regardless of the debt amount. Tell the customer that while it remains unpaid, the threat of court action remains and ask them if they would be embarrassed to be sued for such a small amount. The costs of legal action for debts under $500 in the small claims court is very cheap.

5. Don’t ever write them off

Follow up three times a week at least. Call the customer every second day at different times of the day. Actually annoy them that much that they pay just to get you to go away. Furthermore, all it takes is for one customer to tell his mate that you don’t bother pursuing small debts and suddenly a precedent has been set and every dodgy man and his dog will be using your services, confident that they will never have to pay.

There you have it. We know better than anyone how annoying and frustrating small debts are but do not ever let your emotions spill over. Remain calm and composed and stay positive that you will one day get paid.

Paul Metcalf, Managing Director,