You should have a good plan when collecting your debts. Start by sending invoices the moment a transaction is done. This increases the likelihood that the customer will pay you early. Breakdown all the contents of the transaction and ensure everything is accurate. This is very helpful when recovering factoring debt.
A statement should be prepared and send to the customer if he or she fails to pay on the date he or she promised to make the payments. The purpose of the document is to offer encouragement for the person to pay you. Also, you can send him or her letter outlining the services or good supplied and the time he or she was supposed to pay for them. Do not be rude in the letter.
If they do not respond, call them. Remind them of the debts and listen to what they have to say. In addition, any subsequent actions to be taken if the money is not remitted should be disclosed. Follow the telephone conversation with a letter outlining all that has been discussed during the call.
If the debtor does not respond to all the above, a last reminder letter must be sent. Let him or her know your plans if the money is not sent promptly. Legal cases to recover debts are a burden but remember the law will support you so do not shy away from this. Nonetheless, let an attorney handle the lawsuit for you.
Courts do handle these cases but only after it is clear that the debtor is not ready to give your money back. If this is not the case, you will not be handed your money back even if the litigation process works in your favor.
It is better to prevent bad debts than struggling to recover them once they occur. To do this, ensure you have determined that a customer is credit worthy before giving him or her credit and you can also impose stricter conditions and terms to those who delay payments. Limit the amount you give on credit and you can also give an incentive if customers pay before the due date.
Write down the names of the bad debtors and do not extend credit to them. Remember that invoices cannot be used to pin the customer down in law courts because you write them after the deal has already been closed.
Update your list periodically. Ensure this people pay immediately if they come back for more services or goods from you shop.
A statement should be prepared and send to the customer if he or she fails to pay on the date he or she promised to make the payments. The purpose of the document is to offer encouragement for the person to pay you. Also, you can send him or her letter outlining the services or good supplied and the time he or she was supposed to pay for them. Do not be rude in the letter.
If they do not respond, call them. Remind them of the debts and listen to what they have to say. In addition, any subsequent actions to be taken if the money is not remitted should be disclosed. Follow the telephone conversation with a letter outlining all that has been discussed during the call.
If the debtor does not respond to all the above, a last reminder letter must be sent. Let him or her know your plans if the money is not sent promptly. Legal cases to recover debts are a burden but remember the law will support you so do not shy away from this. Nonetheless, let an attorney handle the lawsuit for you.
Courts do handle these cases but only after it is clear that the debtor is not ready to give your money back. If this is not the case, you will not be handed your money back even if the litigation process works in your favor.
It is better to prevent bad debts than struggling to recover them once they occur. To do this, ensure you have determined that a customer is credit worthy before giving him or her credit and you can also impose stricter conditions and terms to those who delay payments. Limit the amount you give on credit and you can also give an incentive if customers pay before the due date.
Write down the names of the bad debtors and do not extend credit to them. Remember that invoices cannot be used to pin the customer down in law courts because you write them after the deal has already been closed.
Update your list periodically. Ensure this people pay immediately if they come back for more services or goods from you shop.
About the Author:
Connor G. Schiffman has 27 years of experience in commercial lending including factoring, asset based lending, and banking. Connor helps readers manuver through all the account receivable options providing practical and useful knowledge to better understand all your lending options. If you want to learn more about Factoring Company he recommends you check out www.receivablefactoring.net.
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