You should have a good plan when collecting your debts. Start by sending invoices the moment a transaction is done. This increases the likelihood that the customer will pay you early. Breakdown all the contents of the transaction and ensure everything is accurate. This is very helpful when recovering factoring debt.
After the stipulated date of payment is passed, send the debtors transaction statement. Include just the due date and amount in owing. Alternatively, you can send them a letter to remind them that the date of the payment has passed. However, use polite language.
If the person does not respond to the reminder, call them. Engage the debtor only. Remind him or her of the products supplied or the services offered and the amount he or she was supposed to pay. Do not forget to tell them that the date of payment is passed. In addition, let them know of the subsequent steps to be taken. After you end the call, write a letter and forward it to them outlining what you have discussed.
Still, if all this do not bear fruits, remind him or her again about the debt via a letter. Include the plan you have in the event that the debt is not payed immediately. Legal cases are costly but if it is the only you can get the person to pay, then go ahead and do it. Nevertheless, you should get advice from an attorney on how to proceed with the litigation.
Courts can be approached as a last result. You need to demonstrate to the judges that you have tried your best in arguing the person to pay you. Remember that you will get nothing even if you win the lawsuit if the court determines that you never tried to engage the debtor in repaying you.
It is better to prevent bad debts than struggling to recover them once they occur. To do this, ensure you have determined that a customer is credit worthy before giving him or her credit and you can also impose stricter conditions and terms to those who delay payments. Limit the amount you give on credit and you can also give an incentive if customers pay before the due date.
Write down the names of the bad debtors and do not extend credit to them. Remember that invoices cannot be used to pin the customer down in law courts because you write them after the deal has already been closed.
Update the stop list on a regular basis and ensure the names in it are barred from get credit until they have proven their credit worthiness.
After the stipulated date of payment is passed, send the debtors transaction statement. Include just the due date and amount in owing. Alternatively, you can send them a letter to remind them that the date of the payment has passed. However, use polite language.
If the person does not respond to the reminder, call them. Engage the debtor only. Remind him or her of the products supplied or the services offered and the amount he or she was supposed to pay. Do not forget to tell them that the date of payment is passed. In addition, let them know of the subsequent steps to be taken. After you end the call, write a letter and forward it to them outlining what you have discussed.
Still, if all this do not bear fruits, remind him or her again about the debt via a letter. Include the plan you have in the event that the debt is not payed immediately. Legal cases are costly but if it is the only you can get the person to pay, then go ahead and do it. Nevertheless, you should get advice from an attorney on how to proceed with the litigation.
Courts can be approached as a last result. You need to demonstrate to the judges that you have tried your best in arguing the person to pay you. Remember that you will get nothing even if you win the lawsuit if the court determines that you never tried to engage the debtor in repaying you.
It is better to prevent bad debts than struggling to recover them once they occur. To do this, ensure you have determined that a customer is credit worthy before giving him or her credit and you can also impose stricter conditions and terms to those who delay payments. Limit the amount you give on credit and you can also give an incentive if customers pay before the due date.
Write down the names of the bad debtors and do not extend credit to them. Remember that invoices cannot be used to pin the customer down in law courts because you write them after the deal has already been closed.
Update the stop list on a regular basis and ensure the names in it are barred from get credit until they have proven their credit worthiness.
About the Author:
Connor G. Schiffman has 27 years of experience in commercial lending including factoring, asset based lending, and banking. Connor helps readers manuver through all the account receivable options providing practical and useful knowledge to better understand all your lending options. If you want to learn more about Working Capital Factoring he recommends you check out www.receivablefactoring.net.
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