#collections #collection #money #debt - Debt Collecting Agency
Business debt collection is when collecting payments from customers for goods or products that was made on credit basis. Past due or delinquent accounts become a priority on any business and establishing an effective collection strategy is a must. And as easy as it looks this activities are not the most pleasant ones, therefore, represent one of the most stressful activities for business owners.
Keeping track of their accounts receivable is one of the reasons business lost track of accounts that become delinquent (overdue), and the fact that most of the people, even outside of this round, are not comfortable putting pressure in other people to pay. When there is no debt collection plan for the business this may result in a financial crisis.
An effective debt collection plan must be included in all sales plan, collecting the over due account as quickly as possible and rewarding customers to keep paying on time generates a solid financial status and ensure the business stays on track.
When a customer show signs that is not paying on time or not paying at all, this doesn’t mean that you may put all you attention into this account, but been persistent with the accounts that represent problems when collecting the accounts, let’s say that a customer is going through – such as divorce, sickness or unexpected financial problems – When collecting delinquent accounts, a business owner must be on the position of support, presenting the opportunity of getting your customer the feeling that they are getting help from the collector (in this case a business owner, in-house department, etc. ) persevering in a good business relationship is a clue, in most of this cases are temporary and you can recover the debt with out compromising your business relation and the opportunity to sell or provide service to them.
Establishing an action plan depending on the needs of the business will work:
* Establishing Solid Credit Policies. When Businesses are able to identify problems before they occur it’s key, establishing credit limits, base on business credit reports, credit scores, credit history, etc. this provide lenders with a way in how good or bad are clients when is time to pay. This can be as flexible as your cash flow allows. Is advice to revise and adjust the business credit policies yearly, since after a year many things can happen like; change on laws or that a good customer just simply become a pain for other business.
* Debt Collection Plan: Keeping track of A/R, when there is many customers buying on credit basis in a period of time (e.g 30, 45, 60 days) keeping track of this accounts may represent an extraordinary effort. Activate a collection plan where includes series of friendly reminders which can be; phone calls, letters or personal visit, listen what debtors have to say, propose solutions like; payment plans, let them know when you are going to contact them expecting payment, let debtors tell you their story, but always focus the conversation in the debt itself and committing them with payments. This needs to be right away when the account become overdue.
* Debtors don want to pay. When you establish a simple debt collection plan, most of the times this works, but this is not an ideal world and facing debtors that simply wont pay, this can become an stressful experience. Debtor will push until you drop the towel and let them go away without paying. There is when a business needs to turn the account into a Debt Collection Agency, if it is business collection then a Commercial Debt Collection Agency. Commercial Collection Agencies exist because of this debtors that want to make life miserable to business that trust them with products/services, having an army to collect the delinquent account mean that a business keep their focus on their – cash flow, profit and sales – activities. The most easy way to collect this accounts is starting with a commercial collection price quote, this will show you an indication of how soon and how much can be collected.
* Repeat the cycle.
An elaborate plan can be implemented depending on the nature of the business, but when you talk with a commercial collection agency they can help business establish an in-house debt collection plan with a commercial collection support for those difficult to collect. Get an analysis of the accounts receivables and start collecting effectively.
Article Source: J. Curtis – www.articlesnatch.com
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