No matter what business you are in, chances are, at some point, you might have faced a situation, where they ask you for an owed debt. For both debtor and creditor, the whole process can be daunting.
A lot of creditors/lenders turn to an attorney or collection company to recover the debt, but many of them also make an attempt at collecting on their own before opting for the professionals.
We have a few pieces of advice that every business owner should know when dealing with commercial debt recovery.
Before you even pick up the phone, make sure you know everything you can about your debt. Have copies of every invoice, every contract, basically every piece of document that relates to the debt. Have them in front of you when you the phone rings.
Also be prepared for what explanations you may hear, and what you will say to them. Remember, the end goal is to make sure that the collection agency is not using any illegal means of collecting the debt. That doesn’t mean you need to be rude or pushy, but it does mean not letting them base a false case against you.
Be ready to ask them for the payment plans or send invoices if necessary.
Also, be prepared with knowledge of the laws that govern debt collection. They control what agencies can and can’t say. Take a good look at the laws and make sure they don’t follow things not mentioned in the book.
There is every possibility that the late payment you owe is a simple matter of a lost check or an unreceived invoice. It may not be probable, but it is possible. Make sure to present the actual scenario when the collector call.
If you go into the conversation assuming the best, the collector will feel respected, even if it turns out they just haven’t received the payment.
This may sound condescending or childish, but the truth is, people, want to be addressed with respect, even if they are in the wrong place. The old adage about flies and honey? It’s true.
Even if you are very frustrated with this particular collector, take the time to gather your thoughts prior to picking up the call, and make sure you are calm. Commercial debt recovery is a sensitive topic, and a simple conversation can escalate quickly.
Keep in mind the saying that you can’t control anyone but yourself. Even if they become abusive, keep your own voice calm and your words rational. Don’t give in to the temptation to match them in their disrespect.
From the first phone call to the receipt of the payment, make sure you have everything in writing, and in multiple copies.
Keep notes of every interaction between you and the collector, and keep a detailed file of every conversation or meeting. This documentation ensures that there is no possible misunderstanding and there is no way they can misrepresent what you have said or agreed to.
This can be a good time to invest in a good tracking software for your company so that you can maintain a digital file on them that is easily accessible.
You need to understand that they know the fact that sometimes commercial debt recovery doesn’t result in a big lump-sum check.
Commercial debt recovery can take a good amount of time, so it pays to be patient. This doesn’t mean to give up or fall into their trap of illegal means of collecting the debts.
There comes a point in commercial debt recovery when it is just time to call a spade a spade and realize you need the help of the professionals.
A professional can act as a middleman between you and your creditors because they have the skills needed to solve your debt situation quickly.
Commercial debt recovery can sound like a nightmare. After all, no one really wants to be at the receiving end of it.
But with some patience, perseverance, and these tips, you can ensure that your collecting agency doesn’t take you for granted and use illegal means to collect the debt.
What tips have been most beneficial to you? Let us know in the comments.