Avoid Using Debt Collection

Many businesses avoid using debt collection as they have no use for it. By our existence as a company, you can tell many others cannot avoid needing recovery services. How do they do it?

It may seem counter-intuitive for us to advise how to avoid using our services. However, your efforts to mitigate unpaid accounts relieves time and stress on your end and makes collection efforts more straight forward if needed.

Here are simple things you can do to your current system to mitigate debts in the future.

Prepare

To avoid using debt collection, you need to prepare for the journey your invoice may take. Just like a family outing where you need to bring hats, water bottles, food, a book for kid 1, spare change of clothes for kid 2 as they always get messy, GPS tracker for kid 3 as they always run off…..

There are so many things which could happen to your invoice. As the example above also shows, the more work you have, the more that can happen and the more prepared you may need to be.

This can look like changing your workflow from calls to confirmation in writing. Maybe your next step is written and signed contracts. What about having a scheduled process to follow invoices along their perilous journey…

Process

I am a simple guy, my brain works 1-2-3, cause and effect, what is the next step. We believe to avoid debt collection, your accounts should be similar. For example:

• Due Reminder
• Follow-up #1 X days overdue
• Follow-up #2 X days overdue
• Final Warnings X days overdue
• Action

Having a set template for follow-ups keeps the stress of figuring out how to get your payment away. Doing this keeps the pressure on your debtor and creates the urgency for payment to be made. We find creating an ethical sense of urgency and importance to a debt is one of the best ways to recover debts.

A process cannot be the be-all and end-all as a debt is not always cut-and-dried. Sometimes some finesse is needed.

Propose

So there’s more to your debt than meets the eye. Does your debtor dispute the invoice? In financial hardship? Ceasing communication? Making unfair demands? This may hurt, but sometimes you must swallow up your pride to resolve the situation, whether the principle is correct.

Although it may be difficult, proposing alternative ways to resolve the matter can be the final steps you can take to avoid using debt collection. This step really depends on how willing you are to settle for a lower amount or agreement.

As every situation is different, we can recommend is that all proposals is put in writing. If it’s a settlement, put forward a without prejudice offer to save on costs with 7 days to accept – that kind of thing.

Then what?

Worst case scenario, you are left with us, the collectors.

Thankfully, we are used to the situation never being the same and we are ready to deal with what you have to throw at us. If you are unsure if you have done all you can to chase up an unpaid invoice, give us a call. We will be happy to discuss if you have done everything you can to avoid using debt collection and what we can do to assist.