Business Bad Debt Collection Choices and Solutions

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Business Bad Debt Collection
Choices and Solutions

When it comes to running your company, business bad debt collection is often a very needed part of your business to help improve your cash flow by recovering bad debt.

Most of your customers pay on time, but its those few problem customers who won't pay after you've provided goods and services, that greatly affects your bottom line.

We've listed some options for you to explore. Depending on your time and resources will determine the direction you want to take.

Letters and Phone Calls

Whether your organization is small or large, business bad debt collection is most successful when action is taken early. It may be a good idea to call your customer a few days before the actual due date as a reminder. And to make sure there isn't going to be a problem. You can head off any potential problems by being proactive.

Of course, if payment isn't received by the due date after you've sent out the first invoice, making a call as a reminder might expedite matters.

If payment isn't received after the second statement, following up with a courtesy notice is a good idea.

A second letter, if needed, should state the seriousness of the matter, and that other legal means, including debt collection, might become necessary if further ignored. Here's an example of a letter you can use.

Threaten Legal Action

Threatening legal action is a serious matter, so make sure you follow through with your intentions if this is the route you're going to take. Don't make idle threats. Follow through on the exact date that you've stated on your demand letter.

Sometimes the mere threat of a lawsuit will solve the bad debt problem. But again, back up your talk with action.

Small Claims Court

Filing in small claims court is another option for collection. Business bad debt collection costs in lost productivity and cash flow, so small claims court can be a relatively inexpensive solution.

This can work well if you're owed small amounts of money.

Go by your local small claims court, fill out the paperwork and the court will set a date for your case.

You don't need an attorney, and the filing fees are relatively small. However, the small filing fees can add up if you have several delinquent customers.

Civil Court

If you're owed larger amounts of money, you'll need to file in civil court. You'll also need to hire an attorney because its a more complex process.

Costs here can add up quickly, with attorney's fees, etc.

Mediation

You can hire a mediator to negotiate a settlement between you and your debtor. Of course, hopefully the two parties can come to an agreement to settle. Mediation can be an inexpensive solution, with the benefit of an unbiased third party.

Bad Debt Collection Agency

There are a number of commercial collection agencies, so research them thoroughly before hiring one.

Ask about their success rates. Most average around 14-20%, with a few approaching 60% or better. Success rates are very important, since this means how much money they can recover for you.

Ask what are their total costs. Many agencies charge a percentage of the money they recover. Typically, it can range from 20-40%. Some can charge as much as 50%!

Again, research this, as there are agencies that charge a flat fee. While there might be some upfront costs for you, in the end, you get to keep much more of your money that's recovered.

To receive a debt collection quote, fill out the brief form below. One of our consultants will contact you within 24-48 hours.

Collection Agency Quote Request

Please note that all fields followed by an asterisk must be filled in.

Company*
Company*

Your name, and position*
Your name, and position*

E-mail Address*
E-mail Address*

Web Site URL

Street Address*
Street Address*

City*
City*

State/Prov*
State/Prov*

Business Phone*
Business Phone*

Best time to contact

What services are you interested in?*
What services are you interested in?*

	Bank/Credit Union Collections
	Commercial Collections
	Consumer Collections
	Medical Collections
	NSF Check Collections
	Debt Portfolio Scoring Analysis

Total dollar amount of accounts?*
Total dollar amount of accounts?*

How often do you need these services?

Additional or Standalone Services

	Credit Reporting Services to 3 Bureaus
	Consumer/Commercial Credit Check Services
	Debt Portfolio Scoring Analysis
	Skip Tracing Services
	Electronic Check Deposit (eliminate bank trips to deposit checks)
	Check Guarantee Services (never get burned with another NSF check)
	e-Merchant Terminal (accept credit/debit cards online, and remotely with any cell phone)
	Lower your Visa/MC/Debit Card processing fees.....Guaranteed!

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