Commercial collections happen because a business owes you money for products or services that you provided. Here's what you need to understand about the process.
You Need a Process
You need a process. And it needs to be in writing, ideally reviewed by an attorney, so that you can refer to it when you need it. As you develop your process, you must keep in mind that there are state and federal laws that govern collection efforts. This includes what debt collectors can and cannot say to debtors. Your process should include:
•- When you will begin calling on past due accounts
•- When you will consider a payment plan or settling
•- How long you'll wait before sending the account to a third-party commercial collections agency
•- When you will hire a lawyer to exercise your legal rights
•- Guidelines for determining whether a debt should be written off by your business
This list is not exhaustive. Speak with experienced legal counsel to discuss your business's process.
Understand Your Collection Options
When another business owes your business money, you have options to try and collect on it. Of course, you can try to collect on the debt on your own. You could hire an individual to collect on past due accounts for your business (this is known as first-party collections). You can outsource the debt to a third-party agency to collect on it. You can look into selling the debt. You can choose small claims court. You could also choose to speak with a lawyer who focuses on commercial collections.
Collecting on Debts Can Affect Your Reputation
Although you're doing the right thing by trying to collect on money that is owed to you, it's important to understand that how you, your employees, or even third-party collectors act during the process can affect the reputation of your business. As discussed in this post, it is imperative that you protect your reputation by acting with integrity and following the laws related to collections.
For more information on the commercial debt collections process, contact attorney Ronald P. Slates today.