If you are like many business owners, there are probably many areas in your business that you would prefer to place your focus on before you even begin to think about commercial collections. Customer service, providing for clients, accounts receivable and payable, and even building your business probably top the list. Although those items are certainly important, commercial collections should be your first focus. Here's why.
Some Business Owners Think It Won't Happen to Them
Many new business owners think that past due commercial accounts will never happen to them. They know they'll provide the best services or products along with the best customer service. So, who wouldn't want to pay their bill? This belief can be further enforced by going through a year or more of a client base who pays on time, every time. This, of course, is the ideal, and generally does not last.
Therefore, a savvy business owner should think about commercial collections before starting a new business. Doing your research to develop a commercial collections timeline and learning the basics about commercial collections can put you ahead of the game. You won't be taken by surprise when it happens to your business.
First, there is the total on the account that is past due. Next, there may be interest and late fees that you've added on. Don't forget the time that you or one of your staff members may spend trying to collect on those accounts. Also, consider the cost of replacing the client with a similar client who would pay their account and spend more money. Thinking about commercial collections now means that you can develop a cost effective plan to manage your expenses. An experienced collections attorney can help you devise an effective - and lawful - plan of attack for collecting on past due accounts.
Commercial Collections Have a Lot of Factors Involved
A one-size-fits-all approach to commercial collections simply won't work. Each past due commercial account has its own factors. While it happens, it is rare that a business doesn't pay its bill just because it decided to run a scam. In many cases, the business is dealing with internal problems, such as lost invoices or ineffective employees, an external problem such as income issues. If the business is experiencing cash flow issues, you could also run the risk of never being able to collect on the account. If the business files bankruptcy or shuts down, you may be extremely limited when it comes to collections.
Learning Your Options for Commercial Collections
Focusing on your options for commercial collections now will make the process less stressful for you when the time comes for you to deal with it. Determine whether it is best for your business to first try to collect on the accounts on its own, whether you should outsource to a third party commercial collections agency or debt buyer, or whether you should work with an attorney who may be able to help you get paid through the courts. Your choice should be educated and should also be in the best interest of your business and its needs.
For more information on the commercial collections process, contact experienced attorney Ronald P. Slates today.