The problem of unpaid invoices can plague a business, causing a drag on cash flow, and can lead to increased interest expense for capital needed to run your business on a daily basis. Preventing non payments by instituting a set strategy can help keep your business at the head of the line of your customer’s list. Here are debt collection solutions for companies to help reduce the number of unpaid invoices on your books.
Send a Friendly Reminder
Start your process of recovery by sending a friendly letter reminding your customer of the debt. Invoices do sometimes get lost in the mail or may be overlooked in the daily rush. A friendly reminder is a way of preventing non payments and can resolve the problem of unpaid invoices quickly and efficiently, without resorting to debt recovery resources.
Offer a Discount For Payment
In some cases, you may wish to “sweeten” the deal for the customer, by offering a discount for payment within a certain number of days. This can often persuade a non-paying customer to take the better deal, rather than suffer calls from a debt collection agency or other debt recovery resources.
Move to a More Formal Collection Letter
If your customer still refuses to pay, the next in your list of debt solutions for companies should be sending a formal collection letter, stating the work or service done, the invoice number and the amount due. Remind your customer of the terms of the contract or sale, so that any misunderstandings can be resolved.
Warn Your Client of Legal Action
Before taking more stringent legal action, business etiquette suggests that you alert your customer to the next step in the process. The threat of having a collection company hounding them or other legal action can often trigger a prompt payment.
Turn Over the Account to a Debt Collection Agency
Debt solutions for companies can take over the burden of contacting your customer to recover payment on an unpaid invoice. These agencies are good debt solutions for companies, because they provide a “neutral third party” to make a strong case for payment. However, a debt collection agency will take a portion of the payment for their service.
Consider Small Claims Court
Your county government provides a court system that allows businesses to recover unpaid accounts to a certain monetary amount through a legal process. The paperwork involved in delivering a summons to the debtor company and other costs can be considerably more than other debt collection solutions, but it does create a judgment against them on their record that can be one of the effective debt collection solutions that generate fast payment.
Preventing non payments begins by carefully researching the companies with whom you do business. In addition, you can make your invoicing process easy and understandable, to avoid misunderstandings that can cause delays in payment. Finally, know when to stop spending time and energy on uncollected balances and employ debt recovery resources that can help you receive at least a portion of the money that is owed to you.