Commercial debt collection is a process, like all businesses, if this process is not perfected then the business has a greater chance of failing. We will look at some of the most common pitfalls in regards to collecting business debts, which are all easily avoidable. The goal is to help you and your business get paid on time and to profit for years to come.
The first pitfall with commercial debt collection is not having a plan at all. The plan does not have to be too intricate, as long as you have a plan of action. Generally, at 30 days do you send a letter reminding the customer of the outstanding debt? At 60 days do you call? At 90 days do you turn the debt over to a collection agency or attorney? These are basic actions and deadlines that need to be addressed. If you are able to do this, then you are well ahead of the curve.
A second pitfall is not delegating debt collection properly. This is common in any small business, because staffing is usually tight and employees are forced to handle multiple roles. The biggest question that you need to ask is, would I be better situated letting someone else handle this? It does not have to be a 3rd party collection agency or attorney, but possibly someone internally can do a better job. Do not send an engineer to change a light bulb. You will be better situated doing what you do best, and that is focusing on your business. True, you can handle your businesses commercial collections, but it will cost you more than hiring a collection agency or attorney. Once you have found a commercial collection agency or attorney that is professional and does a good job, then it is imperative that you setup a working relationship with them. Make sure they understand your business needs and that they understand your specific industry.
Commercial collection agencies and attorneys are there to help businesses of all sizes collect their debts and get back on track with their operations. Do not let bad debt and outstanding accounts slow you down. The key with debt collection is to act sooner than later, because you never know when a company will default on your account and you will have a harder time getting paid.
The Voss Law Firm, P.C. helps businesses of all sizes manage their debt load and guide them through the litigation process. We are able to apply pressure that other collection agencies cannot - file a lawsuit for example. The Voss Law Firm, P.C. offers free, unlimited, no obligation consultations to all clients.