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.
A statement should be prepared and send to the customer if he or she fails to pay on the date he or she promised to make the payments. The purpose of the document is to offer encouragement for the person to pay you. Also, you can send him or her letter outlining the services or good supplied and the time he or she was supposed to pay for them. Do not be rude in the 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.
Courts can be approached as a last result. You need to demonstrate to the judges that you have tried your best in arguing the person to pay you. Remember that you will get nothing even if you win the lawsuit if the court determines that you never tried to engage the debtor in repaying you.
It is better to prevent bad debts than struggling to recover them once they occur. To do this, ensure you have determined that a customer is credit worthy before giving him or her credit and you can also impose stricter conditions and terms to those who delay payments. Limit the amount you give on credit and you can also give an incentive if customers pay before the due date.
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.
Update your list periodically. Ensure this people pay immediately if they come back for more services or goods from you shop.
A statement should be prepared and send to the customer if he or she fails to pay on the date he or she promised to make the payments. The purpose of the document is to offer encouragement for the person to pay you. Also, you can send him or her letter outlining the services or good supplied and the time he or she was supposed to pay for them. Do not be rude in the 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.
Courts can be approached as a last result. You need to demonstrate to the judges that you have tried your best in arguing the person to pay you. Remember that you will get nothing even if you win the lawsuit if the court determines that you never tried to engage the debtor in repaying you.
It is better to prevent bad debts than struggling to recover them once they occur. To do this, ensure you have determined that a customer is credit worthy before giving him or her credit and you can also impose stricter conditions and terms to those who delay payments. Limit the amount you give on credit and you can also give an incentive if customers pay before the due date.
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.
Update your list periodically. Ensure this people pay immediately if they come back for more services or goods from you shop.
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 Invoice Discounting he recommends you check out www.receivablefactoring.net.
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