Collecting on bad debt never became more important than when the latest recession hit business owners. Scrambling to pay debts of their own, business owners looked at the accounts past due and looked to them for a quick infusion of badly needed cash. But collecting on debt isn’t that easy.
The older a debt becomes, the more difficult it is to collect on it. This is something business owners have known for years and it’s something they’re trying to avoid happening in the first place. Setting up an effective billing strategy can help keep some of the clients from going into customer debt, but strategies like these only do so much – come clients simply won’t pay on time and others won’t pay at all.
Companies that want to make concerted efforts to collect on bad debt will make calls, send emails and offer other payment options to keep their clients from going into past due customer debt. These are common courtesies that help bolster and establish customer loyalty while effectively improving the company’s cash flow. Alas, these tactics don’t work on everybody and some clients will continue to hold out on their payments.
You’ve held up your end of the deal; you provided services, reminded them of their responsibility to pay, offered them flexible payment options and you’re still not getting what is owed to you. Now it’s time to let them know of your intention to turn the account over to collections. Some companies will have their lawyers draft a letter to let them know how serious they are about getting the account current. This ups the level of seriousness on the side of the client and usually evokes a response in the form of payment.
Nobody wants to get sued. As a last-ditch effort, some companies will bring the issue to court where a judge can order the client to make good on the account. No company wants to take their clients to court, but when debt spirals out of control, something has to be done or the business will flounder and possibly crash.
Increasingly, companies are looking to the debt collection industry as the saving grace. The above tactics work when applied by well-trained individuals. But not every company is fortunate enough to find these individuals, which is why they go to reputable debt collection agencies. These agencies have the technology that helps them track down clients with customer debt that is 90-plus days old.
Not only do these agencies have the latest technology, they’ve also got the trained staff that knows how to effectively communicate with debtors. They know how to listen effectively yet establish a professional relationship with the debtor that lets them know they intend to collect on the account. When done right, the collection agency can actually enhance the image of the company for whom they work.
Omega RMS, llc., is a receivable management solutions company that knows all the effective tactics that convinces debtors to get current with their accounts. With a careful eye on the Fair Debt Collections and Practices Act, Omega follows regulations with great attention while helping you to get accounts paid.