Debt Collection Basics for Office Managers or Accounts Receivables - Nexum Group Inc | Florida Debt Collection Agency

Debt Collection Basics for Office Managers or Accounts Receivables

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Debt Collection Basics for Office Managers or Accounts Receivables


Every single company in business today, there is a time when it must collect debts. Debt collection can be needed for several reasons. It can be because certain clients don’t ever bother making the payment on time, or some clients have a lot of previous payments pending up into a tall pile and your company just can’t afford to be patient anymore. It can also be needed because of your trouble at your end, possible employee mistakes or lack of due diligence. Whatever the cause may be, debt collection must be done. Here are a few facts regarding it that will help your company carry out this irksome but unavoidable process smoothly.


Credit Check on Clients

Before allowing clients and customers from completing a transaction especially if the amount is substantial, it is extremely important to carry out a credit check on clients. This provides you with information regarding the clients’ financial standing and thus gives you some assurance about their ability to pay their dues.

However, even if the credit check comes back positive, the client still may renege on payments to which you will ultimately have to resort to commercial debt collection.


Don’t be Too Lenient

Allowing a maximum of two unpaid transactions should be enough after which you should reserve the right to freeze the client’s account and possibly their assets until payments are cleared.


Staying Up on Your Receivables


Receivables or ‘accounts receivables’ is the sum of money that is to be received by your business from your clients. For staying up on your receivables you need to do the following:

  • Keep a checklist. Note down the exact amount, dates and other details regarding all balances and dues.
  • Cross reference that with the client’s history of payments and see if they have always been late or have been negligible lately. The latter type of clients are more likely to easily pay their debts upon asking.
  • Once the waiting period is over, it is best to promptly inform the client of their pending dues and ask them politely to make the payment.
  • The first contact for this should ideally be via phone.
  • The second contact should be in the form of a written notice like an email, letter or fax.
  • If both contacts fail to yield results, then the third mode of contact should be in person.


How to Avoid Bad Debt Write-Offs

You may get cases where after several tries, you just end up writing off clients as bad debt and suffer losses. To avoid bad debt write-offs, you should do the following:


  • Be polite. Approach matters. A friendly but firm approach goes a long way in producing positive results and gaining loyal customers.
  • Never threaten or abuse. No matter how frustrated a client makes you, never resort to harassment of any kind. This will not just ruin your company’s image but may also result in criminal charges being pressed against you.
  • Do background checks on prospective clients.
  • Make debt payment available in easy methods. Small instalments may be useful in some cases but asking for more than the original debt will only drag the payment further. Be fair and work out a solution with the client that the client can actually deliver.


These commercial debt collection facts and tips should help your company do well in this strenuous endeavour.

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