Debt collection is a company’s greatest nightmare. It’s bad enough if you owe the bills, but it’s much worse if you have customers that owe you money. You may be in debt without ever realizing it, therefore you must understand how to efficiently recover your obligations.
But how precisely do you go about doing that?
The Best Debt Collection Advice Every Business Owner Should Know
Not every company knows how to deal with customers that refuse to pay their costs. This is particularly true if your company does not specialize in delivering services or if your knowledge of how to deal with them is limited. This is why we’ve compiled a list of suggestions and tactics to help you recover any payments that your non-paying customers may owe you.
Never do business without a written contract
Have you ever transacted with a customer without even signing a contract? We’ve witnessed this hundreds of times while assisting our own customers. Due to the importance of a contract in protecting your company, very few of them ended on a positive note. There have even been cases when the debtor successfully counter-sued their creditor. So, before you begin offering your services or goods, be sure you have a signed contract.
Credit checks assist you in avoiding problematic clients
Did you know that there is a simple technique to prevent customers who are attempting to avoid paying their bills? That way is to do a credit check to discover what is going on behind your prospective client’s closed doors.
Credit checks will show how your prospective customer pays their other creditors and suppliers. Observing a variety of problems with their payment patterns gives a picture of how they intend to pay you. This makes it simple to decide whether to cooperate with them, impose stricter terms and conditions, or not to engage with them at all.
Personal guarantees ensure that you get your owed fees
Bankruptcy is a problem that many companies will face. However, bankruptcy, like debt, affects more than just the organization that is suffering it. Bankruptcy may also have an impact on a company’s creditors.
Even if you have a contract, you have a very limited chance of receiving your promised payments if a company declares bankruptcy. Contracts are related to the company rather than the person who owns it. Personal guarantees may assist with this problem.
With a written personal guarantee, you may recover your fee from the previous owner of the firm even if the business is going to go bankrupt. It enables you to take legal action against the person and recover your money via their personal belongings.
Always have a legal professional or a lawyer on hand
A typical issue that many company owners face is the fact that they do not have a legal expert on their side. You must keep in mind that a single word might result in the loss of your owing money. A mediator, such as a lawyer, a staffing firm such as staffingdebt.com, or any other legal specialist, may help you avoid this problem.
Legal specialists will know just how to persuade the court to rule in your favor. They also assist you in maintaining parity with your debtor’s legal team.