You should have a good plan when collecting your debts. Start by sending invoices the moment a transaction is done. This increases the likelihood that the customer will pay you early. Breakdown all the contents of the transaction and ensure everything is accurate. This is very helpful when recovering factoring debt.
Statements should be forwards to the debtor if he or she fails to make payment on the agreed dates. This is a document which communicates the amount you owe the person and the date you were supposed to get the money. This is meant to encourage the person to make the payment. Another option is sending a letter to remind the person the amount he or she is supposed to pay you and the date the repayments were supposed to be done. Be polite in your letter.
If they do not respond, call them. Remind them of the debts and listen to what they have to say. In addition, any subsequent actions to be taken if the money is not remitted should be disclosed. Follow the telephone conversation with a letter outlining all that has been discussed during the call.
Still, if all this do not bear fruits, remind him or her again about the debt via a letter. Include the plan you have in the event that the debt is not payed immediately. Legal cases are costly but if it is the only you can get the person to pay, then go ahead and do it. Nevertheless, you should get advice from an attorney on how to proceed with the litigation.
Before going to court, you should have tried all measures possible to recover your money. If it comes to the attention of the judge than you had not made reasonable attempts to get your money back, you may not be given the amount the debtor has paid even if you win the case.
Rather than get frustrated by debtors who do not want to pay you, take preventive measures. Ensure you give credit to those you have proven to be credit worthy. Also, strict terms should be imposed when extending credit. In addition, have the maximum number you can give credit and give incentives to those who repay early.
Write down the names of the bad debtors and do not extend credit to them. Remember that invoices cannot be used to pin the customer down in law courts because you write them after the deal has already been closed.
The stop list has to be updated regularly. The customers listed therein will have to pay in cash if they come to buy goods or services from your business company.
Statements should be forwards to the debtor if he or she fails to make payment on the agreed dates. This is a document which communicates the amount you owe the person and the date you were supposed to get the money. This is meant to encourage the person to make the payment. Another option is sending a letter to remind the person the amount he or she is supposed to pay you and the date the repayments were supposed to be done. Be polite in your letter.
If they do not respond, call them. Remind them of the debts and listen to what they have to say. In addition, any subsequent actions to be taken if the money is not remitted should be disclosed. Follow the telephone conversation with a letter outlining all that has been discussed during the call.
Still, if all this do not bear fruits, remind him or her again about the debt via a letter. Include the plan you have in the event that the debt is not payed immediately. Legal cases are costly but if it is the only you can get the person to pay, then go ahead and do it. Nevertheless, you should get advice from an attorney on how to proceed with the litigation.
Before going to court, you should have tried all measures possible to recover your money. If it comes to the attention of the judge than you had not made reasonable attempts to get your money back, you may not be given the amount the debtor has paid even if you win the case.
Rather than get frustrated by debtors who do not want to pay you, take preventive measures. Ensure you give credit to those you have proven to be credit worthy. Also, strict terms should be imposed when extending credit. In addition, have the maximum number you can give credit and give incentives to those who repay early.
Write down the names of the bad debtors and do not extend credit to them. Remember that invoices cannot be used to pin the customer down in law courts because you write them after the deal has already been closed.
The stop list has to be updated regularly. The customers listed therein will have to pay in cash if they come to buy goods or services from your business company.
About the Author:
Connor G. Schiffman has 27 years of experience in commercial lending including factoring, asset based lending, and banking. Connor helps readers manuver through all the account receivable options providing practical and useful knowledge to better understand all your lending options. If you want to learn more about Account Receivable Financing he recommends you check out www.receivablefactoring.net.
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