Improving Your Business’ Internal Debt Collection

Comments Off on Improving Your Business’ Internal Debt Collection 04 March 2011

Recovering delinquent debt drains resources, and the recovery process often fails. With the time, money and manpower spent on debt collection, many businesses find it more appealing to hand off delinquent accounts to a debt collection agency rather than face the negative impact on the company.

Of course, taking steps to increase success with in-house debt collection can be a rewarding endeavor. With skill and determination to succeed, businesses can achieve great results in pursuing delinquent debt on their own.

The trick is to get started before the debtor is delinquent. Call the client prior to the payment due date as a reminder so that more of the individuals and companies with which business is done will make payments on time.

Don’t wait until a payment is thirty or more days late. Debt collection success requires making contact early on. Make the first call or send the first letter to collect the debt ten days after the payment due date. Doing both in conjuncture with each other really drives home the necessity to pay, so call first, tell them they will receive a letter and send it immediately upon ending the call.

Being congenial on the first attempt to collect the debt achieves great results. However, as debt delinquency grows, businesses must be more adamant and firm in their stance to demand payment if they expect to see results. Without a definitive show of determination, it is highly likely that the debtor will ignore the attempts at recovery.

One way to increase the bottom line is to pursue smaller debts first. These are more easily recovered because it is more likely a debtor can pay the smaller sum immediately. Debt collection is a more difficult task with larger sums, since these are often harder to gather and sometimes require working out a payment plan.

Continuing to extend credit to delinquent debtors is a mistake. It doesn’t provide motivation to clear the record if the debtor can still receive the goods or services they need. Rather, cutting off credit lines until the debt collection process is complete will show the urgency of paying off bad debt so they can continue to make the purchases they need to function.

With some determination and logic, a lot of time and money can be saved in the debt collection process while increasing the amount recovered in the pursuit. Being sure to stand firm in the resolve to reclaim lost money is essential to the success of the endeavor.

Next, discover additional valuable facts and resources on debt collection, as well as collection agencies options and collection agency solutions.

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