How Businesses Should Successfully Go About Collecting Debt
It doesn’t take a financial whiz to know that businesses run on profits. If you aren’t bringing in money, you simply aren’t doing yourself or your employees any favors. Depending on the types of services and products that you are offering there are probably many times when you have to issue your customers credit. There is nothing wrong with this, as it is just a natural part of doing business. Of course, it doesn’t help when you have those clients that just won’t pay you what you are owed. You probably want to head right down to their home or place of business and take a legal approach. Unfortunately, this isn’t the approach that you should be taking. What is the right way to go about trying to collect from your clients?
Keep Your Cool
It is only natural to get upset when you have a client that won’t pay for the services of goods that you provided them with. You have every right to be upset, but you do not want to show that side of yourself. Sit back, take a deep breath and try to remain as calm as possible. When you show off this side of yourself to the customer they are just going to take it to heart and will even less likely cooperate with you. Every time you call a customer and request money or send them a reminder for payment, you have to be calm, cool, and collective. If you are upset or frustrated the debtor will be able to detect it in your tone of voice. Try to be nice and positive, as this will likely garner a much better response.
Know The Legalities Of The Situation
If you don’t know anything about the legalities of debt collection it is just going to make the situation worse. In fact, it will be like you are just fumbling around in the dark. This is why you need to immediately familiarize yourself with the laws, so that you will not your rights and legal options when it comes to collecting debts. This will not only provide you with a better understanding of the situation, but it will make you more confident when you are interacting with your debtors. Did you know that you have the legal right to search the social security number of an individual that legally owes you money? This is just one of the many legal things that you can learn in your quest.
Consider Selling Your Debt
At the end of the day, there are going to be those customers that just won’t pay no matter what you do. Maybe they just don’t have the means to anymore. Sure, you can’t write these debts off as a charge off, but instead of losing all that money, you can always consider selling them to a portfolio recovery company. These companies will simply purchase large numbers of debts from companies that have been unable to collect on said debts. Of course, you aren’t going to get anywhere near the amount that you are owed, but it is much better than taking a total loss altogether.
Remember To Document Everything
When it comes to debt collection there are very few things that are more important than proper documentation. In the event that the situation ever goes to court, you will already have everything correctly documented and ready to present to the courts. Make sure you are recording every time you speak with the customer, take notes of the conversation, copy and certify notifications that you are sending, and save e-mail correspondences. Pretty much keep track of every time you are in contact with the debtor and what the conversation revealed. This will prove to be extremely handy in future endeavors.
Never Result To Harassing
It can be extremely frustrating when you are making a call or two every week trying to collect on old debts. However, this will probably be considered harassing and that is something that you want to avoid at all costs. Of course, you have to be persistent, but just remember that there is always a fine line and you do not want to cross it, because it will just make the chances of you collecting even worse. Never scream, downgrade, or get into arguments with the clients, as this will also be viewed as harassment.