Commercial collections can be a frustrating process. Here are 4 commercial collection tips every business owner needs to know.
Doing Your Own Collections? Review the Account First
Before you pick up the phone, mail out a letter, or otherwise contact the representative of a past due commercial account, take the time to review the account. Sure, you know it's past due, but reviewing the account enables you to answer any questions the debtor may have. You should know the amount due, the last time a payment was made, and the amount of the payment. In addition to helping you be more knowledgeable, knowing the dates on the account can also help you determine the account is within the statute of limitations.
Know Your Options
With commercial collections, you generally have two choices: keep them in-house or outsource them. If you choose to outsource, you can either choose to work with a debt collections agency or a commercial collections lawyer. Using a lawyer can give you more options to collect on the debt. Most collection agencies won't take a debtor to court for you. An attorney can give you advice as to whether you should pursue the account through the court system or if you have other legal remedies. This is especially helpful if the business in question is involved in a bankruptcy, sale, or other business transaction that affects the company's financials.
Consider Offering a Payment Plan or Waiving Fees
If you keep the process in-house, seek legal counsel to ensure that your system for collecting a debt is lawful. Also, consider offering a payment plan or waiving certain fees if the past due business can make a payment, which can help your business collect at least some of what is owed. This is important since past due accounts affect the bottom line of your business.
With commercial collections, it's very rare that you'll get paid after you make the first call or send the first letter. You must continue to contact the debtor in order to get paid. Be assertive, but remember to treat the debtor with respect. Come up with a collections time line and follow it.
For more information on the collections process, contact attorney Ronald P. Slates today.