Within any business, solid customer relations are the crucial elements to success. Without solid business practices, your money will not be received in a timely fashion, your invoices will go unpaid, and your merchandise and goods will cease being delivered to you. How can you remedy these soiled business relationships? Collecting past due debts is the very first step to bringing your money straight to where it is needed – in your accounts.
The key to remember when beginning debt recovery is to start collection efforts as soon as possible. One of the biggest mistakes business owners tend to make are letting the accounts go past due for too long. 30-60 days past due is still early enough for favorable results, however once the account goes past 60+ days, your chances of debt recovery grow slim.
One of the first things you can do when you are ready to begin collecting on past due accounts is sending out a collection notice. This notice can be sent out when the debt is approximately 30 days past due, and gives your debtor a chance to make good on the money owed. This letter also gives a kind reminder for the debtor to review their records, as sometimes a missed payment truly is just an oversight on their part.
If there is no response from the letter after 5-10 days, a follow up call is always a good step to take. A phone call is an important step to take whenever attempting to collect on a debt, as it gives a personal note to the collection efforts. While it is true that many debtors simply avoid phone calls from their creditors, some will be straightforward and speak with you regarding their debt. During this phone call, you can find out if there are any issues which will keep them from repaying the debt, such as recently losing a job or another form of economic hardship. Many individuals owing money are more likely to set up repayment terms once they feel their creditor will work with them.
As a professional courtesy, another collection call can be made after 5 days should the payment not be received in your office. During this debt recovery call, you can offer your debtors a chance to set up a repayment plan. Unfortunately, many debtors will be more than willing to set up a repayment plan while on the telephone, without actually intending to make good on the payment plan. Should a payment not be received after the initial 30 days, sending written correspondence, a 5 day call and a 10 day call, there is the need to escalate the past due debt to the next level.
When you are having a hard time collecting past due debts for your debtors, hiring a collections agency may be your best bet into getting that money back to your accounts. Collection agencies are skilled professionals with a solid background in the research and collection of past-due accounts. These professionals will have the knowledge and the ability to track down your debtors, contact them, and give them an opportunity to repay their debt with favorable terms. Hiring a debt collection agency, which can also handle global international collections allows your staff to focus on their core work assignments instead of spending hours each day tracking down missed payments.
While nobody truly enjoys collection calls and the task of hounding their debtors over missed payments, leaving the task in the hands of professional collection agents is the best step to help ensure your company survives these hard economic times.