Debt Collection Basics for Office Managers or Accounts Receivables - Nexum Group Inc | Florida 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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This agreement is made between Nexum Group and You herein referred to as client.

  1. Client warrants the authenticity of all claims placed with Nexum Group for collections. Client agrees to forward supporting documentation for each claim to prove the validity of the debt upon request.
  2. Nexum Group agrees to use its best efforts to collect on any and all claims submitted.
  3. Claims placed with Nexum Group by CLIENT shall be charged the below contingencies.

Any claim under (1) year over $1,000 shall be charged a contingency of 30%. Any claim over (1) year over $1,000 shall be charged a contingency of 35%. Any claim that is under $1,000 or requires litigation shall be charged a contingency of 40%. Nexum Group is owed its respected fee regardless if the debtor pays the CLIENT directly or Nexum Group.

  1. Client shall report all direct payments made within (4) days of receipt of payment. It is agreed that commissions due on direct payments shall be remitted to Nexum Group within (14) days.
  2. Any merchandise returned to CLIENT by debtor will entitle Nexum Group to a 10% contingency of the invoiced amount.
  3. CLIENT agrees that Nexum Group can forward a case to an outside law firm to assist in the recovery to assist in the recovery and grands permission to do so at their discretion. CLIENT must give the approval to transfer the case if the transfer results in additional charges
  4. Any claim placed by CLIENT that is found to be placed in error or previously paid will be bill by Nexum Group at a rate of 10% of the amount.
  5. Nexum Group shall account to client all payments collected monthly and provide portal access to track payments online. CLIENT will be provided a statement enclosed with each payment made by Nexum Group. Anything collected before the end of each month will be remitted at the end of the following month.
  6. CLIENT may recall a claim forward to Nexum Group if the claim is not in legal status or there has been no recovery on the account within 90 days. Any cancellations must be expressed in writing via email to corporate@nexumgroupinc.com. Upon cancellation, all fees owed to Nexum Group shall be paid in full. Claims withdrawn after payments have been received or intended to be received CLIENT shall be charged the full contingency for balance submitted. 
  7. This agreement shall is governed by the laws in the state of Florida. In the event, any provision is found to be invalid or unenforceable, that provision shall be deemed removed and remaining provisions shall remain in full effect.


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