Don't Be (Too) Trigger Happy. Things You Need To Consider Before Chasing Debt

Business owners face the issue of debt collection every day. It takes careful judgment and a systematic approach to recover money that your customers owe the business. The best way to prevent debt problems is to manage debtors effectively. Even so, some customers will not pay on time despite your best efforts. Likewise, procrastination or inaction will reduce your chances of getting any money.

Good judgment is essential to the successful collection of debt. While you don’t want to annoy important clients, you also don’t want to allow others (and there will always be some) to take advantage of your business by treating it as a free source of money.

Due to today’s uncertain economic conditions, it’s common to encounter issues with late payments for your goods or services. Ultimately, we all have obligations to meet, and some debtors may not be able to do so immediately. Late payments can sometimes be recovered, but some may not be worth pursuing.

Here are some factors to consider while chasing a debt, such as determining when to pursue a debtor or delaying collection, and some options to consider if collection proves to be difficult.

Determine Whether the Debt Is True Or Not

It is never a pleasant experience to call or communicate with a debtor. What’s worse is that sometimes collectors contact consumers about debts that are not legitimate. This is intimidating to the client and reflects the unprofessionalism of a debt collector. Make sure to have thorough research on the clients’ documents and address the right individual liable for the debt. A common error is a missed payment.

Understand The Status of The Debt

A debt is either paid or it isn’t. The time to send a debt through to debt collection is when you are frustrated, not angry. By the time you are angry, it’s probably too late if you have expressed that anger to the debtor.  Debtors are seeking excuses to not pay you, anything to make it your fault and not theirs.  Sometimes, when collecting debts, you might contact the debtor accidentally, even though you’ve received it in full or have already been settled in some other way. If your system is unorganised, or collecting debt has changed internally, you could accidentally contact someone who has already paid off their debts.  If in doubt you can contact the debtor, preferably in writing, and ask them whether the debt has already been cleared and proof for the same. It is best to ask for copies of any records or information that proves the debt has been settled earlier.

Confirmation Of Contact Details

If you are having trouble contacting a debtor, you may have the wrong details on their address, phone number and email. Even worse, if you send LBA (Letter Before Action) to the wrong person, the chances for you to collect the debt is minimal. The contact details can be confirmed with a detailed check of the documents and applying the proper verification method.

Rectification Of Disputes

Once you (or your financial counsellor or another representative) have been notified by a debtor that the debt is in dispute, all debt collection activities must cease until the dispute is resolved. Attempts to resolve the dispute as soon as possible with the least amount of effort.

There are genuine disputes and delaying disputes. Genuine disputes fall under your companies’ standard terms and your desire to please a customer.  Delaying debts tend to be voiced once debt recovery becomes involved. The cleaner your matter, the easier it is to resolve.  If there is an issue that you are aware of, it is well worth letting your debt collector know so that they can handle it.  While this is not the ideal solution, if it is just a delaying tactic, your debt collector will operate as a third party for you if they have the right information, it won’t be a problem.  Your debt collector works with you, rather than for you. They are your gladiator going into battle and you want them well armed so that they win.

Review LBA (Letter Before Action)

You may forget the clauses to act upon, so it is beneficial to review the LBA document that will give you the outline of debts being chased and their details, and most importantly, the deadline for the payments and the response from the debtor.

If you cannot collect your debt internally or it is taking up too much time. Then you need to hire a debt collection agency to collect your debts. eCollect is a reliable and trustworthy debt collection, who can help you to recover your debts without any additional problems. Get in touch with them today if you are struggling to collect.