Many companies allow many months to pass before seeking debt collection. The problem with waiting is that it decreases the chances that it will ever be collected. The more time that goes by the more time the defaulted has to flee or justify the reasons why the debt has not been paid. These are only a couple of the many reasons why you shouldn’t wait to collect debt though. Here are five more reasons why you shouldn’t wait.
Reason #1: Less Likely to Be Able to Find the Person
The one that owes money may not have fled, but instead has moved. Since you are not in direct contact with the person, it may be difficult to get in touch with him or her again. While over time, you may be able to find the person, it’s not desirable if a debt is already many months late.
Reason #2: More Time to Build Defense
When someone hasn’t paid a bill and begins to feel the pressure to pay it, the person may start to try to weasel out of it. A person does this by coming up with a long list of reasons why the person shouldn’t have to pay and evidence amounts as time goes on. The person can even hire a lawyer to help get out of paying the debt, which could end up costing you more in addition to the debt of the payer.
Reason #3: Life Situations May Make It Impossible to Pay
With time come life tribulations, which could end up making it impossible for the person to pay on past due accounts. Job loss, unexpected expenses, and more are all reasons why debt may end up being pushed aside and as time goes by, the more of a chance these situations could come into play.
Reason #4: Debt Mounts
If the person hasn’t paid your invoice, it’s likely he or she isn’t paying other people’s invoices. Debt can mount to a point in which the person can only pay a little on each. This means that it could take months or years to receive your money. When debt happens, it’s best to get it paid off as soon as possible before the person says that he or she is unable to pay because of other debts.
Reason #5: Loss of Invoice Information
Sometimes the reasons don’t come from the person owing the debt; it comes from the person sending the invoice. As time goes on, there’s a higher chance the invoice could get lost. With a lost invoice, the person seeking debt collection is unable to prove the payer needs to pay on it.
The Sooner the Better with Debt Collection
The sooner you start the debt collection process the better. You’ll avoid many of the reasons why people and companies do not receive payment on their invoices. Take control of your invoices with organization, give your payers an appropriate time to pay, and if there is no payment, then action should be taken immediately.