Cannabis and CBD collections: Mistakes That May Hinder Your Success As a cannabis business owner, your operations depend on being paid on time by the clients you supply. When there are too many debts outside, your liquidity will be affected and hence your operations. But what are the collection rules that you need to know? Here are the mistakes that could be hampering your collection efforts.
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Asking for More Than is owed
As a business owner trying to collect a debt from your cannabis customers, you are not allowed to falsify the amount a client owes you. You are also not permitted to add fees, expenses or interests not permissible by law. What this means is that if you failed to outline an extra fee in the original invoice amount, you cannot collect it during the process of collection.
Breaking Confidentiality
Even as you collect debts from your cannabis past-due accounts, you need to know that debt collectors are prohibited from revealing the debt situation to any other people apart from the debtor or their authorized representative, for instance, a spouse or lawyer. You are only allowed to contact other third parties in case you want to locate the debtor or find their phone number or current place of work.
Threatening Your Debtors
When a client will not pay you what is owed despite your efforts, it can be to be angry and frustrated. However, you need to remember that it is against the law to make any kind of threats and this even includes threatening to file a lawsuit, garnishing wages, filing charges or taking any unspecified action against the client. Note also that making repeated calls amounts to threats.
Overlooking Small Balances
One mistake that people make is ignoring small balances. Whatever amount you are owed by the client, it is best to address it earlier to prevent it from becoming overwhelming to the client. Smaller debts are also generally easier for clients to pay than bigger debts. Therefore, do not let these debts to become unmanageable to the client. Besides, if you have shown an unwillingness to accept smaller amounts of debts, you will be sending a message to the client that you don’t tolerate any level of debt.
Failing to follow up
Any robust credit policy needs to be structured. It is important that your debt recovery men follow a specific procedure to ensure debtors are consistently contacted. By demonstrating persistence, potential defaulters will learn they just cannot take any notice of the debt. Make a decision on the interval of contacting them until they pay.
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Being inflexible and inability to review terms
While it is important to have a strong credit policy that you send to the client at the start of your dealings, it is even more vital to learn a thing or two from experience. After some time, you will be able to profile high-risk customers and the low-risk ones. Know customers that have genuine cash flow problems but are otherwise prompt payers. It is important that you take this into consideration.
Inasmuch as you need your debtors to pay so that your business operations can go on smoothly, you should be careful not to shoot yourself in the foot. There are some cannabis debt collection practices that could become costly. You need to know what the law says about the collection and be patient and understanding even as you pursue your debtors to pay.
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