Past due accounts happen to every business. Commercial collections are no easier than consumer collections. When done incorrectly, it can ruin business relationships, damage the online reputation of your business, or cause your business to be the subject of a lawsuit. Before you send a business account to commercial collections, do these 4 things first.
Follow-Up Phone Call
Right before the due date and a few days past a due date, make a quick follow-up phone call to the contact on the commercial account. Before the due date, you're just making sure they received their invoice. Many electronic invoice programs will let you know when someone views their invoice online, but sometimes online invoices get lost in spam folders and physical invoices may get lost in the mail.
This also gives you the opportunity to answer any questions that the client may have about the invoice, the goods provided, or the services. One of the reasons why new clients pay late is because they don't understand the payment schedule. A follow-up phone call can also help!
Provide Convenient Payment Methods
How many methods of payment does your business accept? If you have more than one payment method, you're doing yourself a big favor. Commercial account holders often pay faster when they have options. There are numerous online payment portals that enable your clients to pay online. You can also use a debit or credit card reader as well.
Convenient payment methods are important because if the named contact has lost their business debit card, you can accept a payment via check. Even PayPal allows people to make payments using a check. Some banks also allow your clients to deposit the money directly into your business account.
Consider a Payment Plan
Consumers aren't the only ones that can suffer through an economically difficult time. Before you send a commercial account to collections, consider setting up a payment plan with the client. This will keep their account in good standing and you continue to be seen as a problem solver. Once you've both agreed on a payment plan, get a signed agreement that lists the amount of the payments and the due dates. Then, provide follow-up calls on those due dates to secure the payment.
Determine Whether Commercial Collections Is Feasible
Before you turn an account over to collections, you must determine that this is the right decision. Do you have all of the necessary documentation related to the outstanding debt? Do you have a signed service agreement or contract? Do you know the date of the last payment and the amount that was paid? Is the commercial client still in business? There are many factors that will help you decide whether you should utilize the commercial collections process or write off the debt.
For more information on whether you should hire an attorney to help you collect a debt, contact experienced commercial collections attorney Ronald P. Slates today.