The Top 7 Mistakes Businesses Make When Collecting Debts

Key Insights Every Business Should Know When Collecting Debts

For business owners, collecting past due payments from customers and clients can be daunting. Unfortunately, this important area of business can become even more stressful when you and your employees don’t understand the laws regarding debt collection, don’t have a clear financial policy for overdue invoices, or don’t work with a 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 these 7 mistakes that many businesses make while collecting debts.

Delaying Follow-Up On Unpaid Invoices

One of the most common problems with unpaid invoices is simply waiting too long. We see quite often that the longer invoices remain unpaid, the more effort it’ll take to collect them all, meaning that they won’t be collected that easily either.

While you can expect the client to pay eventually, it is a tricky strategy because time is money. So the best you can do is to create an efficient approach that helps you get fair results, not just wait for the best.

You can avoid this mistake by:

Sending automated reminders before and after the final date
Setting up clear internal policies when delays happen
Following up on your invoices professionally. You don’t have to be afraid of it, it’s your right after all.

Not Establishing Clear Payment Terms In Contracts

If you don’t offer specific payment terms in your contract or invoices, you’ll have greater chances of creating misunderstandings. Terms like “due upon receipt” may seem ok, but the client may interpret it differently from what you expect.

You can easily avoid this mistake by including exact due dates in every agreement and making sure your terms are agreed upon in writing before delivering the service. Remember, you can also contact a trusted Gilbert commercial debt collections agency to get help when establishing your payment terms.

Ignoring Red Flags from New Or Existing Clients

The signs are usually very notorious: clients who often delay payment, frequently dispute charges, or make partial payments, to mention some. Ignoring these signs can lead to bigger problems, so it’s better to be wise with them.

Here’s what you can do:

Run a mandatory credit check for new B2B clients
Implement stricter payment terms for high-risk accounts
Regularly review past payment behaviour to adjust your collection strategy

Getting Too Personal Or Aggressive In Collection Efforts

Companies must follow the law when trying to recover debts, and the law is very clear. It 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.

Failing To Keep Detailed Records Of Invoices & Communications

If things get serious and you have to go to court or escalate the case, having detailed records is quite important. Without this paperwork, proving what’s owed or arguing your side can be extremely difficult.

We recommend using accounting software to track all invoices and payments. It’s also a good idea to keep copies of all email threads, payment reminders, and signed agreements.

Relying on Untrained Internal Staff For Debt Collection

While your internal team may excel at customer service or accounting, successful commercial collections require specialized skills and a disciplined, structured strategy.

Nevertheless, you can try these techniques to be more prepared for debt collection:

Offer basic collections training to staff who manage accounts receivable.
Use special tools and modern systems to standardize the process
Consider working with a debt commercial collection agency

Waiting Too Long Before Hiring a Professional Debt Collection Agency

Most businesses wait too long to collect their debts. Whether this is because they are concerned about protecting their business relationship or haven’t established a clear credit policy, businesses that 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, get in touch with Mesa Revenue Partners as soon as you can.

Our Arizona commercial collection 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.