Debt Collection Made Easy - Debt collection is the one area of business that companies must deal with despite its unpleasantness. Debt recovery is especially hard when customers are facing financial difficulties. While hiring a collection agency to help with your debt collection efforts, there are a number of steps that your business can follow to try and get the money owed without have to resort to more extreme measures. When someone is late on a payment or defaulting on a loan, then being heavy-handed will not resolve anything, instead, using diplomacy and following the below-listed steps will help.
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Debt collection is the one area of business that companies must deal with despite its unpleasantness. Debt recovery is especially hard when customers are facing financial difficulties. While hiring a collection agency to help with your debt collection efforts, there are a number of steps that your business can follow to try and get the money owed without have to resort to more extreme measures. When someone is late on a payment or defaulting on a loan, then being heavy-handed will not resolve anything, instead, using diplomacy and following the below-listed steps will help.
Author: Jake Freeman
Date: Jun 16, 2010 - 10:42:23 AM
Debt collection is the one area of business that companies must deal with despite its unpleasantness. Debt recovery is especially hard when customers are facing financial difficulties. While hiring a collection agency to help with your debt collection efforts, there are a number of steps that your business can follow to try and get the money owed without have to resort to more extreme measures. When someone is late on a payment or defaulting on a loan, then being heavy-handed will not resolve anything, instead, using diplomacy and following the below-listed steps will help.
Step one
Make sure that your invoice is sent out the moment the service has been rendered or the product delivered to your client. Do not let a week or two go by before sending your invoice – timeliness is crucial to getting your money on time.
Step two
Give your customers a 30-day deadline to make all payments for an invoice. Do not let them have terms of more than 30-days because the longer in the past the debt is, the easier it is for the customer to forget about it and just let it fall by the wayside.
Step three
If you notice that an invoice has passed the 30-day deadline, the receivables agent in your company should call right away to find out what happened. In fact, an email should be sent to the person in charge of paying invoices at that company and that email should be followed up the next day with a phone call. Generally you can work things out immediately by talking directly with the payables person at the company.
Step four
If you notice that an invoice is still unpaid even after having spoken with the payables person, then you can elevate the matter to that person’s boss or, depending on the size of the company, you can go straight to the company president. Executives really do not like being bothered by such matters and you can be sure that if it reaches that high, the invoice will be paid.
Step five
If the invoice remains unpaid, even after having spoken to a manager or an executive at the company, you can try to negotiate at least a partial payment or set-up some form of instalment payments to help ease the financial burden on the company.
Step six
Should you be unsuccessful at setting up a payment plan or a comprise with your customer, then it is time to turn over the invoice to a collection agency. These agencies will typically pay you a portion of the invoice up front and then attempt to collect on the whole invoice from the defaulting company. It is a very good method of debt recovery of at least a portion of your money if you are unable to get anywhere following the steps above.
Debt collection can be a tricky affair
and it is often a trying one. In many instances, customers are unable
to make payments because of financial woes and trying to get money
out of them is tough. However, by turning over your debt collection
needs to a collection agency, you will at least be able to recoup a
portion of what you are owed.
Jake Freeman writes for Small Business Directory. Visit the site to find companies & compare business services. Read buyers' guides and articles and get free quotes for moving, office relocation, telemarketing, cargo shipping and more!
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