Effective Strategies for Collecting on a Debt

Collecting on a Debt

Many companies consider collecting on a Debt as the last resort when they undertake new business with a customer.  However its crucial that you have a system in place that will enable collecting on a Debt as a way to improve your cashflow and weed out the bad payers.

When looking at a strategy for collecting on a Debt, the main point to consider is escalation.  The customer needs to be aware that every stage of non-payment, a likely charge will be incurred, and you need to emphasis this threat in each correspondence with them.

Here’s a brief list of escalation procedure to follow at each stage of the invoice cycle:

20-30 days:

customer-service telephone call to customer to make sure they have a copy of the invoice, and that the invoice is on this months payment run (emphasis this is not a chaser, and that you are merely checking they have a copy to help them process correctly)

30-40 days:

official chase call to advise invoice is overdue and it is company policy to add interest as long as late-payment continues

40-50 days:

final reminder call to advise interest is accruing on the invoice and the matter will be passed to a 3rd party for collection, and all costs will be added on.

Basically, they need to provide you with a valid reason for non-payment, or they need to pay.

Always remember that collecting on a Debt should be a structured procedure and if your company follows this procedure, then you will get paid quicker.

Also when collecting on a debt, you MUST follow-through on any threats to escalate, for example, if you give your customer 7 days to pay or you pass it to a Solicitors or Debt Collection company, then you must do that or you lose credibility, and they will never take any future threats seriously again.

If you need any help collecting on a Debt, please don’t hesitate to contact our team at Taurus and we can see if we can help you out, call today on 01332 565 350 , visit us HERE or email enquiries@tauruscollections.com

Taurus Debt Collections and Recovery Logo

Data Protection License Number (ICO no.) Z2530888. All content ©2013 Taurus Collections. Site built and optimised by Whirlwind Hosted in the cloud by: novacloud.co.uk

-->