On Recovering From Factoring Debt
You should have a strategic plan to make your debtors pay. The starting point to avoid bad debts is to make sure that invoices are sent immediately after a transaction takes place. The dates, products details and costs of the items sold should be outlined. Ensure the details in your invoice are accurate for successful factoring debt recovery.
After the stipulated date of payment is passed, send the debtors transaction statement. Include just the due date and amount in owing. Alternatively, you can send them a letter to remind them that the date of the payment has passed. However, use polite language.
If the person does not respond to the reminder, call them. Engage the debtor only. Remind him or her of the products supplied or the services offered and the amount he or she was supposed to pay. Do not forget to tell them that the date of payment is passed. In addition, let them know of the subsequent steps to be taken. After you end the call, write a letter and forward it to them outlining what you have discussed.
If the debtor does not respond to all the above, a last reminder letter must be sent. Let him or her know your plans if the money is not sent promptly. Legal cases to recover debts are a burden but remember the law will support you so do not shy away from this. Nonetheless, let an attorney handle the lawsuit for you.
Courts do handle these cases but only after it is clear that the debtor is not ready to give your money back. If this is not the case, you will not be handed your money back even if the litigation process works in your favor.
It is better to prevent bad debts than struggling to recover them once they occur. To do this, ensure you have determined that a customer is credit worthy before giving him or her credit and you can also impose stricter conditions and terms to those who delay payments. Limit the amount you give on credit and you can also give an incentive if customers pay before the due date.
Remember an invoice cannot be produced in court as evidence that a person owes you money because it is sent after the deal is closed. List down the customers you should not extend credit to.
Update the stop list on a regular basis and ensure the names in it are barred from get credit until they have proven their credit worthiness.
After the stipulated date of payment is passed, send the debtors transaction statement. Include just the due date and amount in owing. Alternatively, you can send them a letter to remind them that the date of the payment has passed. However, use polite language.
If the person does not respond to the reminder, call them. Engage the debtor only. Remind him or her of the products supplied or the services offered and the amount he or she was supposed to pay. Do not forget to tell them that the date of payment is passed. In addition, let them know of the subsequent steps to be taken. After you end the call, write a letter and forward it to them outlining what you have discussed.
If the debtor does not respond to all the above, a last reminder letter must be sent. Let him or her know your plans if the money is not sent promptly. Legal cases to recover debts are a burden but remember the law will support you so do not shy away from this. Nonetheless, let an attorney handle the lawsuit for you.
Courts do handle these cases but only after it is clear that the debtor is not ready to give your money back. If this is not the case, you will not be handed your money back even if the litigation process works in your favor.
It is better to prevent bad debts than struggling to recover them once they occur. To do this, ensure you have determined that a customer is credit worthy before giving him or her credit and you can also impose stricter conditions and terms to those who delay payments. Limit the amount you give on credit and you can also give an incentive if customers pay before the due date.
Remember an invoice cannot be produced in court as evidence that a person owes you money because it is sent after the deal is closed. List down the customers you should not extend credit to.
Update the stop list on a regular basis and ensure the names in it are barred from get credit until they have proven their credit worthiness.
About the Author:
Connor G. Schiffman has 27 years of experience in commercial lending including factoring, asset based lending, and banking. Connor helps readers manuver through all the account receivable options providing practical and useful knowledge to better understand all your lending options. If you want to learn more about Factoring Bank he recommends you check out www.receivablefactoring.net.
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