Effective Business Debt Collection Practices
Businesses rely on revenue from a variety of sources to ensure ongoing success, and as a means to pursue growth. However, when that revenue is slow to arrive due to non-payment for goods or services received, or other reasons, it is important to implement sound debt collection protocols and prevent your operations from suffering due to outstanding debt.Take Steps to Collect Debts
Once an amount owed becomes overdue, it is important that a business implement a strategy to initiate collection of that debt or hire a knowledgeable professional or team that can create and implement an effective plan on its behalf. It might surprise some that there are companies that go out of business because they simply do not know how to pursue the money they are owed. Here are some basic steps to take when collecting debt:
- Make a friendly reminder. Whether with a phone call, email, or even a letter, remind the customer that they have an outstanding balance. In the event the debt is due to an oversight, include payment options and contact information to expedite remittance.
- An “overdue payment reminder” is a more formal communication that one can send if the friendly reminder fails to elicit the desired result.
- If no follow up communication or effort to set up payment is received, it is time to send a Final Notice that informs the client of the amount owed, time overdue, and possible methods of payment.
- Make personal contact. While this may be uncomfortable for one or both parties, sometimes a face-to-face conversation is the right next step to obtain payment.
- Submit a formal letter of demand for payment. If nothing else has worked, this may be a last resort prior to more aggressive collection techniques.
One additional step a business should take is ceasing to continue supplying the delinquent client with ongoing goods or services. Sometimes cutting off supply is enough incentive for some to make payments, but it also prevents your business from extending credit to a client that has yet to pay past amounts due. If basic debt collection strategies are ineffective, it may be time to seek the help of an experienced and knowledgeable business debt collection professional.Let a Reputable San Francisco Debt Collection Attorney Help Your Business
If your business has difficult collecting monies owed from clients or sums due as a result of other financial transactions, it is important not to allow debts to age for long periods of time. Work with an experienced and knowledgeable California debt collection attorney to implement an effective collection plan. SAC Attorneys LLP builds and executes debt collection programs that meet your specific needs. Contact experienced Silicon Valley business and debt collection attorney at (408) 436-0789 to schedule an initial consultation to discuss your case.