Unpaid invoices, no matter what size, can be a burden. These debts can be the result of the customers having financial difficulties. They can also stem from errors in the company’s account receivables process. Whatever be the reason, the unpaid invoice can be the source of much frustration. If the problem isn’t solved swiftly, it can become challenging to recover lost payments.
If you have issues with individual clients, commercial collection agencies can help you with guidelines on how your business can collect old commercial debt.
Recover old commercial debts
There’s a higher chance of recovering the full amount of the debt within 30-60 days. So it can be possible to recover the lost money after this time. After that, however, it can become a much more complicated process.
Identifying issues quickly is a crucial factor in managing any debts. In addition, having transparent processes in place help manage relationships, find solutions, and have your invoices paid. In most cases, commercial debt collection utilizes industry expertise and gives access to credit information.
Statute of limitations
It’s best to try and resolve the payment issue as quickly as possible. However, if you no longer receive communication from the debtor, legal action might be necessary. One important thing to keep in mind is the statute of limitations for commercial debts when considering legal options.
It sets out specific time limits on when you can take legal action to recover the debt. The limit differs in every state and depends on a contractual agreement. If these time limits have expired, it may not be possible to take legal action to recover the debt.
The debt itself will exist, and companies will have to rely on different means of recovery.
Avoid debt accumulation
The team in accounts receivable must run a structured process. For example, if a company stops answering emails and calls or fails to meet a deadline, you should escalate the issue immediately. A debt recovery agency will send out prompt invoices and communicate regularly with the clients.
Having clearly stated credit terms on the contracts and services agreements can go a long way in solving any future issues. It also makes a lot of sense to do due diligence on new customers before offering them a line of credit.
When running through credit checks and creating a credit policy for the company, two approaches should be integrated into payment systems and processes. First, invoices must be itemized and checked before sending them to the customers. Commercial collection agencies will forward weekly reminders in case customers fail to pay. It’s essential to choose a company that understands the significance of clear communication and negotiation at every stage. By taking a relationship-based approach, payments are generally received much more quickly without burning bridges.
In case all other remedies fail, you must take legal action. In this case, it helps to have an expert that understands the state and federal regulations. In addition, commercial debt collection agencies will be able to advise you on the necessary steps.
Collection process
After you have decided to use the services of a business debt collection, you get to work as quickly as possible. A professional firm will start the process by running a thorough review. This enables you to get a clearer picture of their current status and operations.
From there, the agency will create a recovery strategy that involves regular contact with the debtor. Again, you can ensure a quick resolution here. Each case will have a unique approach and may utilize emails, telephone calls, or face-to-face meetings with the debtor company.
Final Wrap
If your company has outstanding commercial debt, get in touch with the experts today. You can contact our friendly team today to see how we can help you.
