When to Use a Debt Collection Agent to Recover Money Owed by Clients
For business to business dealings, most firms will ask 30 days credit. In fact, if you don?t accord different conditions, the business law says businesses can take thirty days to pay by default.
Very big companies will sometimes require 60 or ninety days to pay, or maybe even longer. It can be a real problem on your cash flow to be waiting yet another week for payment that?s justifiedly yours.
One thing you can do to grow your cash flow is to be honest with all customers about your willingness to employ a debt collection agent.
Firstly, you need to be utterly clear with clients about the terms and conditions of the merchandise or service you provide, and the process you will follow if those terms and conditions are not respected.
You should get a solicitor to help you write a contract that is most applicable for your company.
You can also cut your risk by running credit checks on new clients before you begin working with them. Have a set of common letters that you mail to customers when money is owed, explaining to them how much is due and the penalisation for not paying the invoice right away.
If you have followed this advice and still not been paid,it?s time to call in a debt collection agent such as Fisher Meredith.
Don?t be oblivious to the problem hoping the customer will pay. Debt collection agencies say the older the debt becomes, the lower the odds of it being paid off. You should work with a company you feel comfortable with.
The benefits of using an agency to continue trailing the debt are clear. They have the time and expertise to focus on the recovery. A debt collection agency that knows what it?s doing will get a quick result. And if the customer cannot pay, they will consider the choices and take formal legal action.
The only negative point is the expense ? commonly up to ten per cent of the debt. But 90 per cent of an outstanding debt paid is better than 100 per cent of the money still sitting in your client?s bank account!