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