Important steps to small business debt collection

Business debt collection is one of the major issues faced by small businesses. Prolonged efforts for collecting debt can cost your business both time and money. There are many practical steps you can take to reduce the need for debt collection or to enhance collection efforts. When things get worse, you should take help of a legal expert to help you in the entire process.

There are many reasons that result in a commercial debt. A late paying customer can be categorized into three main groups. In the first group, fall those who are genuine. They want to clear off the payment but are not in the position to pay. In the second group are the customers who knowingly delay their payment in order to manage their property. And the customers who are never willing to pay fall in the third group. A business should have a robust strategy in place in order to work out their commercial debt collection. For the customers who fall in the third group, you will have to follow an entirely different approach. And, hiring a lawyer for collecting debt from customers falling under the third category is a sensible decision.

Here are the few steps you should take for easy business debt collection.

Payment policy

It is important to safeguard your interests with policies that help you collect your debt. It is vital to have a signed contract for any product or service for which payment will be made at a later date. The policy should contain exact due dates or agreed timeframe in which the payment will be made.

Keep your accounts updated

Accurate and updated accounting will help you identify and work with delinquent accounts. You should keep your clients updated and let them know where their accounts stand. You should provide them with the itemized invoices that include a specific due date for the payment.

Follow the law

It is illegal to threaten, harass or intimate customers who are defaulters. Never threaten the customers with actions that are illegal to take. Take help of a professional commercial debt collection lawyer to help you in the collection process. You should be compliant with the appropriate laws to make sure you are not following any unfair means to collect a debt. The attorney will draft letters on your behalf for requesting payment. They would also help you if any additional legal steps are required.

Be careful when collecting outstanding payments from your customers and take legal help if you are not able to manage the collection on your own.

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Created on Dec 13th 2017 06:40. Viewed 476 times.

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