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.
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 the person does not respond to the reminder, call them. Engage the debtor only. Remind him or her of the products supplied or the services offered and the amount he or she was supposed to pay. Do not forget to tell them that the date of payment is passed. In addition, let them know of the subsequent steps to be taken. After you end the call, write a letter and forward it to them outlining what you have discussed.
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.
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.
To prevent encounters with bad debtors, evaluate the credibility of a person before giving them goods on credit. Also, be strict to those who take long to make the repayments if they come back requesting that you extend credit to them. To avoid high bad debts, limit the amount you give out in credit terms. To encourage people pay on time, you can decide to give financial incentives.
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 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 the person does not respond to the reminder, call them. Engage the debtor only. Remind him or her of the products supplied or the services offered and the amount he or she was supposed to pay. Do not forget to tell them that the date of payment is passed. In addition, let them know of the subsequent steps to be taken. After you end the call, write a letter and forward it to them outlining what you have discussed.
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.
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.
To prevent encounters with bad debtors, evaluate the credibility of a person before giving them goods on credit. Also, be strict to those who take long to make the repayments if they come back requesting that you extend credit to them. To avoid high bad debts, limit the amount you give out in credit terms. To encourage people pay on time, you can decide to give financial incentives.
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 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 Invoices Factoring he recommends you check out www.receivablefactoring.net.
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