Are you doing everything you can to keep your client default rate as low as possible? Regardless of how well you explain the terms of your credit program, there will always be a number of people who pay late, decide not to pay at all or have situations where they need some encouragement to stay out of default.
In the worst-case scenario, the client default situation devolves where they seemingly disappear. They don’t return phone calls; letters to them go unanswered; mail starts to come back undeliverable or a voice message declares that the number is no longer in order. What can you do to protect yourself?
You don’t want to stop offering credit to individuals because we know that it helps develop customer loyalty, more business and more profits. You also don’t want to see your cash flow suffer due to late accounts and client default. One way to protect your business up front is to searching for prospective customer’s credit history to see how well they have kept up with payments in the past. Questionable prospects should be given a low-line of credit or none at all.
Once your prospect appears to be credit worthy, make sure they sign a document showing that they understand what is expected of them when they have outstanding accounts. Let them know before they even make their first purchase that if you don’t receive payment in your required number of days, you will take further measures to get the account current.
Keep in mind that debts that go beyond 90 days late are the ones that are the most difficult to recoup. Don’t be afraid to get a lawyer in on this as they can draw up the language that spells everything out and perhaps get you paid before others should the client fall miserably behind on their accounts and they have everyone coming at them at the same time for payment.
The obvious choice in finding the ultimate protection is to get a debt collection agency on your side. Your in-house attempts to collect debt can be a costly adventure and extremely time consuming. Instead of taking time away from growing your business, you should let professionals take over the debt collection process for you.
Some business owners get anxious when they are approached about partnering with a professional debt collection agency. They think the agency will use strong-armed tactics that scare away future business. However, this is an unlikely scenario because any collection agency that wants to stay in business will treat debtors like they should be treated – with respect and professionalism. Another thing to remember is that by distancing yourself from the collection procedure is actually a positive in the eyes of the consumer.
Omega-RMS, llc., is a professional debt collection agency that has the trained staff, state-of-the-art technology and experience to get your accounts back to where you want them to be – paid in full. Instead of writing off old debt and thinking it’s a lost cause, give Omega the chance at collecting all of your debt for you.