You should have a strategic plan to make your debtors pay. The starting point to avoid bad debts is to make sure that invoices are sent immediately after a transaction takes place. The dates, products details and costs of the items sold should be outlined. Ensure the details in your invoice are accurate for successful factoring debt recovery.
After the stipulated date of payment is passed, send the debtors transaction statement. Include just the due date and amount in owing. Alternatively, you can send them a letter to remind them that the date of the payment has passed. However, use polite language.
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.
Still, if all this do not bear fruits, remind him or her again about the debt via a letter. Include the plan you have in the event that the debt is not payed immediately. Legal cases are costly but if it is the only you can get the person to pay, then go ahead and do it. Nevertheless, you should get advice from an attorney on how to proceed with the litigation.
Before going to court, you should have tried all measures possible to recover your money. If it comes to the attention of the judge than you had not made reasonable attempts to get your money back, you may not be given the amount the debtor has paid even if you win the case.
Rather than get frustrated by debtors who do not want to pay you, take preventive measures. Ensure you give credit to those you have proven to be credit worthy. Also, strict terms should be imposed when extending credit. In addition, have the maximum number you can give credit and give incentives to those who repay early.
Remember an invoice cannot be produced in court as evidence that a person owes you money because it is sent after the deal is closed. List down the customers you should not extend credit to.
Update the stop list on a regular basis and ensure the names in it are barred from get credit until they have proven their credit worthiness.
After the stipulated date of payment is passed, send the debtors transaction statement. Include just the due date and amount in owing. Alternatively, you can send them a letter to remind them that the date of the payment has passed. However, use polite language.
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.
Still, if all this do not bear fruits, remind him or her again about the debt via a letter. Include the plan you have in the event that the debt is not payed immediately. Legal cases are costly but if it is the only you can get the person to pay, then go ahead and do it. Nevertheless, you should get advice from an attorney on how to proceed with the litigation.
Before going to court, you should have tried all measures possible to recover your money. If it comes to the attention of the judge than you had not made reasonable attempts to get your money back, you may not be given the amount the debtor has paid even if you win the case.
Rather than get frustrated by debtors who do not want to pay you, take preventive measures. Ensure you give credit to those you have proven to be credit worthy. Also, strict terms should be imposed when extending credit. In addition, have the maximum number you can give credit and give incentives to those who repay early.
Remember an invoice cannot be produced in court as evidence that a person owes you money because it is sent after the deal is closed. List down the customers you should not extend credit to.
Update the stop list on a regular basis and ensure the names in it are barred from get credit until they have proven their credit worthiness.
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 Business Funding Services he recommends you check out www.receivablefactoring.net.
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