- May 19, 2023
- Posted by: Taurus Collections
- Category: Blog
When managing your business’s accounts receivable, there are many important considerations. One such matter that may arise is whether or not to send someone to collections. It can be difficult and must be handled carefully and professionally to protect you and your company’s reputation.
In this blog post, we will explore the do’s and don’ts of sending someone to the collection so that you know how best to manage these delicate situations when they occur.
Do Understand the Collection Process
When understanding the collection process, knowledge is power. It’s important to know how long it takes, how it works, and what happens once an account is sent to collections. First, the time it takes for an account to be sent to collections can vary based on the creditor and the amount owed. Typically, it can take anywhere from 30 to 180 days after a missed payment.
Once an account is sent to collections, the creditor is handing the case over to a third-party agency to retrieve the debt. From there, the agency will attempt to contact the debtor and negotiate a payment plan or settlement. It’s essential to be informed and prioritise communication with creditors to avoid costly consequences.
Don’t Send A Collection Letter Without An Explanation
When sending someone to collections, it’s crucial to provide a clear and thorough explanation of why this action is being taken. Before hitting send on that collection letter, take a moment to ensure that the recipient understands their rights and obligations. This information can help prevent misunderstandings and conflicts down the road.
No one likes to receive collection letters, but providing a detailed explanation can help mitigate the negative impact and allow for a smoother resolution. Always remember that clear communication and transparency are key for debt collection.
Do Know Collection Laws
It is important to educate oneself on the laws that regulate collection efforts. As a debt collector, you need to be aware of the time limitations and notification requirements put in place to protect the rights of debtors. It is essential to know the dos and don’ts of collecting debt to avoid getting into trouble with the law.
Knowing the collection laws ensures that you are following legal procedures and helps to build trust and credibility with your clients. Therefore, it is advisable to research and equip yourself with the necessary knowledge to carry out your debt collection duties effectively and efficiently.
Don’t Take Legal Action Without A Last Resort
When getting paid for services rendered, it can be frustrating when clients fail to fulfil their end of the deal. While it’s important to exhaust all other options before pursuing legal action, sometimes it’s necessary as a last resort.
No one wants to end up in court, but it’s important to remember your time and effort deserve compensation. If you’re in this situation, don’t hesitate to seek advice from a legal professional to ensure you take the proper steps in pursuing what you’re rightfully owed.
Remember, it may be a difficult and uncomfortable situation, but taking proper legal action can provide the resolution you need.
Do Consider Negotiating Payment Terms
Paying bills and expenses on time is essential to keep your business running smoothly. However, sometimes customers face financial difficulties and struggle to make payments on time, which can cause problems for both parties.
That’s where offering alternative payment terms can come in handy. By negotiating with your customers and providing them with instalment plans or reduced payments over time, you show that you understand their situation and are willing to work with them.
It not only resolves their financial struggles but also helps to maintain a healthy business relationship. So the next time you have a customer with financial hardships, don’t hesitate to consider negotiating payment terms. It could make a world of difference for both of you.
Don’t Engage In Harassment Or Illegal Actions
In any business, money collection can be a tricky process. But it is important to remember to always conduct yourself legally and professionally. Engaging in harassment or illegal actions to collect payment can leave your business vulnerable to costly fines and lawsuits and damage your reputation and relationships with clients.
It is essential to ensure that all communication and actions comply with the law to protect your business and maintain trustworthy relationships with customers. Remember, it is always better to pursue legal means than to risk illegal or unethical practices.
The process of sending someone to collections can be complicated and stressful, but by understanding the collection process, staying up-to-date on state laws, and practising lawful collection efforts, you can manage the process with confidence.
Taurus Collections (UK) Ltd. can be your one-stop destination if you want to successfully boost your odds of collecting debts. Use our Late Payment Calculator to calculate your outstanding credit amount. We help our clients with certain debt collection services that include: