Debt is always a big problem that many businesses will have to deal with. However, debt can still be a problem even if you’re not the one with it. This is usually a problem for businesses that often provide services or products that will be paid for later. Debt issues are an even bigger problem if you end up falling into these debt collection pitfalls.
The 4 Debt Collection Pitfalls You Need to Know About
There are many debt collection pitfalls your business can fall into and those pitfalls could cause a number of problems. However, ensuring that you have a way to identify and avoid these pitfalls is a surefire way to keep these problems at bay. This is why we’ve made this list to help you and your business avoid them.
Not Having a Paper Trail to Follow when Issues Arise
Having a paper trail or complete record of transactions with a customer or client is a fantastic way to set your business up for success. Paper trails are even easier to have nowadays, especially with technology making the process much easier. However, some businesses forget about how to properly handle paper trails or even forget to create clear records. This is a pitfall that can easily cause you to lose your owed fees.
Cutting All Communications With Your Debtor
To start things off, one of the worst things that a business can do to their debtors is to just cut all communications with them. It is almost never a good idea to cut all communications with a non-paying debtor unless you’re ready to go to court. Most non-paying debtors are often willing to negotiate and find terms with you so you can get paid. Once you cut off communication lines, the legal battle that ensues could cost you more than their owed fees.
Being Too Talkative
We’ve mentioned how you should never cut off all communications unless you’re willing to go to court with the case. However, our second debt collection pitfall is the exact opposite of the first; being too talkative with them.
Interacting with a debtor often means having to negotiate the new terms of how they will pay you. However, you should always consider what you say to them. This is especially true if you’re interacting with them directly without the help of a lawyer. Anything you say can and will be used against you in a court of law. And a single sentence or even word could lose you your owed fees.
Not Letting a Professional Handle Correspondence with Your Debtor
We’ve seen many cases where the debtor won a case in a court of law because the creditor said something to damage their case. This type of situation is why you need to make sure you have a legal expert like a lawyer, or a collection expert like http://backdoorhires.com/ to act as a bridge between you and your debtor.
We mentioned earlier that you should have one to help you keep you from saying anything that could damage your case. Lawyers can also help you find the leverage you need to push a case into your favor and collect the fees you’re owed, one way or another. These are just some of the benefits of having one or your team.
Identifying a problem before it happens is one of the best ways to help your business minimize the impact of these problems. This is especially true for debt collection pitfalls that you could be making without even realizing it.