The Importance Of Having a Credit Policy For Debt Collection

For business owners, collecting past due payments from customers and clients can be daunting. Unfortunately, this important area of business can become even more complicated when you and your employees don’t understand the laws surrounding debt collection, don’t have a clear financial policy for overdue invoices, or don’t work with a Gilbert commercial debt collections agency. If you are looking to build your business and avoid mistakes while collecting debts from your customers, take a look at the 7 top mistakes that many businesses make while collecting debts.

Not Knowing The Expense Of Debt Recovery

It’s important to be aware of the costs that are involved in the debt recovery process. Some past due invoices and bills may not be worth the cost to collect on them. Working with a trusted California corporate collections agency who has extensive experience in the field can help you understand whether a debt is financially worth the effort of pursuing so that your company uses your resources where they are most valuable.

Unintentionally Harassing The Customer

Companies must follow the law when trying to recover debts. The law prohibits debtors from intimidating or harassing customers while they attempt to make the recovery. Demands that are excessively forceful or persistent could legally constitute harassment and become counterproductive to the debt collection process. Before attempting to collect on a debt, make sure you understand the debt collection laws in your area.

Not Having a Credit Policy

Many businesses, especially small businesses, do not have a formal written credit policy, which can make it difficult to collect unpaid debt or know which clients are a good fit for a line of credit. Your credit policy will help identify which clients are low risk and which are higher risk, which can help your company set guidelines on credit limits and organize your collection efforts. Without a solid credit policy, you could extend too much credit to someone who is likely to leave you a lot of unpaid debt.

Not Keeping Client Records Up To Date

Cash flow is essential to the health of any business, but without being up to date on your clients’ contact information and records, you may not be able to maintain sufficient cash flow. Keeping track of your customers makes it much easier to stay current on unpaid invoices and debtors so that they don’t control your business.

Inconsistent Follow Up

Having a clear and consistent follow up strategy after you’ve completed a service or provided a product enables you to get paid more quickly, which is important for your business. Prompt collection of overdue accounts promotes healthy cash flow and a balanced budget. Your follow up strategy should include:

Clear contact and deadlines to your customers
Setting credit limits
Credit checks
Implemented a solid credit policy
Consistent schedule for following up with debtors
Knowing when to reach out to your Colorado business debt collection agency

Failing To Communicate Regularly

Failing to provide timely and regular communication with your debts will promote unpaid debts. New York commercial debt collection knows that good communication is key to the debtor-creditor relationship. If your business sends only a couple of emails or letters to your debtors, you are likely to find yourself with many unpaid invoices. A telephone call and other more direct collection methods will result in much more timely payments.

Waiting Too Long To Call a Professional

Most businesses wait too long to collect their debts. Whether this is because they are concerned about protecting their business relationship, are short staffed, have a lack of communication, haven’t set a due date for the payment, or haven’t established a clear credit policy, businesses who wait too long to contact a professional Gilbert B2B debt collection agency run the risk of not recovering their debts at all. Call an experienced debt collection agency and establish clear policies to increase the likelihood of recovering your unpaid debts.

Work With Arizona’s Leading Commercial Debt Collection Agency

We know that business owners are busy and often struggle with unpaid invoices. If you’re wondering how to receive payments on time and want to improve cash flow for your business, one of the best things you can do is get in touch with Mesa Revenue Partners as soon as you have an invoice that is 90 days overdue. Our agency is one of the most trusted in the industry and has decades of experience helping businesses collect their debts while maintaining their valued relationships with customers, clients, and other businesses. Let us help you find non-contentious solutions for debt recovery to improve the financial health of your business. Contact us today to get started.