When the client are not ready or prepared to repay the debt post the due date, then it is really frustrating. You are suggested to take a legal approach instead of walking up and down to their home and office to get the debt collected. Here are some of the successful methods to collect the business debts.
- Act Quickly
Fearing about worried customers, the business feel bad to act quickly on the customers who cannot repay the debt on time. Contact them immediately to know their situation and make the much needed steps. If you even skip a month then the chances of successful debt collection is less. Send past due notice with total amount and days barred, and the penalty or additional interest rates if any in a writing.
- Abide by the law
Threatening and harassment is considered illegal. It is also important to consider the fact that the debt customers might become valuable customers later in the upcoming years. Know about the debt collecting rules and laws before you take any legal step.
- Document all the efforts
Document all your Business Debt Collection efforts. This is the primary source of evidence when it takes a legal action. It includes all the letters, mails and telephone recordings as well. Organize them and these documentation will support your case in the court.
- Keep a Complete Accounting
Carry a complete accounting so that you can deal with your debt client to show then where their debt stands. Also sending them invoices a little ahead of the due date is welcomed to help them prepare for the debts.
- Payment Policy
Always sign a contract with all the payment policies mentioned in writing to the person who takes the debts from your business. This should be a uniform policy followed with all your customers. The exact payment dates, amount and due has to be mentioned in detail.
- Negotiation with Customers
Discuss and negotiate with the customers if onetime payments or payment in installments is feasible to them. They must agree on those terms and make their signature on written documented policies in writing. The legal law firm provider has to verify it before signing.
- Legal Action
Ensure the statutes in debt collecting limitations and file the same with the legal court in a timely manner so that there are no legal issues from your side.