Finance

How To Collect A Debt

Companies typically prosper when they build relationships with their customers that are based on trust. However sometimes customers do fall behind in payments to purchase goods or services that they have received. There are a few ways to address this issue.

Companies typically prosper when they build relationships with their customers that are based on trust. However sometimes customers do fall behind in payments to purchase goods or services that they have received. There are a few ways to address this issue.

First, take inventory of your receivables. By doing this you can track the trends in your customer’s payment histories. It is suggested that you review your accounts receivable at least once a month. To aid you, use accounting software programs that can give you this information in a report that keeps track of the age of your receivables. This will aid you in avoiding accounts that eventually become debts that are uncollectible.

Some of the time, the consumer may be capable and ready to pay up, but your invoice has gotten lost or has fallen to the bottom of their finances pile. It is a good idea to send out monthly statements that recount the status of your customer’s accounts to keep them updated on what is owed.

If an account still remains unpaid, do not be afraid to call them on your own and tell them that you are expecting a payment.

If your attempts to remind your consumers of the bill do not work, stronger action may be needed. Send the customer a demand letter that contains documentation of the fact that your company has delivered goods and that the client was billed for them. Let them know that they are now in breach of contract. In the letter, state when payment is required before further action is taken, and what your next step will be.

Typically you will take legal action. If the amount of money is minuscule, you will be able to pursue your case in a small claims court. For a large amount you should turn to civil court. Be sure to document the agreement between you and the customer and that you pulled your weight by delivering the promised goods or services.

Mallory Megan is employed by a debt collection agency. She also writes stories on business and finance, consumer spending and collection agencies.