subject: Maximize Your Recovery Rate With Improved Credit Management [print this page] Debt collection agencies like JMA Credit reduce dues owed to your business with tried and tested practices, but your debtor recovery rate is more manageable if you nip the problem in the bud. Your clients and partners have an obligation to meet their payment deadlines, but youll still have to consider delays as an unavoidable part of your business. Whatever reasons debtors may have for missing the due date, you have to do some damage control and ensure you recover everything without straining business partnerships. Consider precautionary measures before you sign a client or bring in a business partner, and then persist with the follow-up payments until they fulfill their commitments.
Conduct thorough credit checks on all your potential partners and clients, especially if theyre paying in credit for goods and services rendered. You can ask for proof of a clients financial competency, bank accounts, loan, and credit histories. If youre signing in a new partner, ensure the businesss solvability before committing to any major deals. Prevention is better than cure, and you have to be proactive in your efforts if you want to avoid bad debts.
Some commitments may not push through due to a variety of reasons, and diplomacy usually works its charm on those whove simply forgotten the due date or are going through tight cash flows. Companies like JMA Credit can recover the debts for you, but the service usually requires a fraction of the amount owed as the professional fees. You should make sure youve done your due diligence first, though. Your partners and clients have a right to know about their unpaid dues, and you have to send in the paperwork at least fifteen days before the deadline. The invoice should indicate the identity of the responsible party, its status, and any references to invoices or receipts that identify the amount owed and its deadline of payment. Offer alternative payment methods to your debtor, and consider check, credit card, or cash options even if youre iffy about the other partys preferences.
Make sure the notice reaches the person or department directly responsible for the debt. Youll cut through the red tape by specifying the recipient on the invoice and indicating the due date and debt amount. Follow up with phone calls a few days after sending the notice. Contacting debtors is time-consuming and requires more manpower hours, but itll remind the other party of the urgency of the debt. Letters only do so much to encourage action, and you have to apply a hands-on approach if you want progress and results.
Your discretion dictates the extent of your follow-ups. Make sure each call is recorded and each notice filed for future reference. You can hire extra personnel to handle the debt collection, but its better if you outsource the entire process to debt collectors instead. Specialized services like JMA Credit Solutions come with high recovery rates, even though youll share part of the recovered debt with the collector (as part of the contract). Credit collection agencies are better equipped at assessing the risks of the account. Theyll also implement the best methods to ensure the dues are met as soon as possible.
