How to Collect on Unpaid Accounts

Unpaid Accounts

If you’re in business long enough, you will eventually have a client who misses the payment deadline. Sometimes these are innocent oversights that can be remedied with a second notice or a reminder call. On other occasions, the debtor (whether it be a company or individual) will go to extreme measures to avoid any communication with you. It could be that they are struggling financially and have grown weary of receiving calls reminding them of that fact. It could also be that they have no intention of paying. Regardless of the situation, it is important that you have a strategy for recovering funds from unpaid accounts. You can also visit this website to get detailed information about accounts management and investment as well.

Paper trail

Keep detailed and accurate records of every transaction you have with clients. Each file should have your client’s contact information, a copy of the order or the contract indicating the client was requesting your product or service and the agreed upon price. When you deliver or ship the order, keep record of that as well so that you have some way to prove you did what you said you would. The file should also contain copies of any invoices that were mailed or emailed with payment due dates, copies of receipts for a deposit or any payments that are made and notes about any verbal communication regarding payment along with the date the conversation occurred. All items should be current and properly dated. This paper trail provides the documentation you need should lawyers or the court system ever get involved.

Follow up in a timely manner

Calling people about their past due accounts is not a fun task. However, the longer you wait to contact a client who has not paid by the due date, the less likely you will be to collect those funds. Be proactive. Sometimes a second notice is all somebody needs. Regardless, the sooner you begin the debt collection process, the better. Are you interested in learning more about financial management? Visit this website for further details.

Bring in the professionals

While follow-up is important, you don’t want to get bogged down so much with unpaid accounts that you have to neglect other vital aspects of your business. There are debt collection professionals who can take over the process when you’ve tried all you know to do. Here are some of the benefits of having a credit collection company recover the debts for you:

  • Focused attention. You are able to concentrate on serving your paying customers and managing your business rather than worrying about how to collect past-due funds. And the professionals are focused on recovering funds. Because they do such tasks on a full-time basis, they have methods and resources you don’t.
  • You don’t have to settle for a loss. Too often businesses just write off overdue accounts as a loss associated with doing business. Not only is this unnecessary, but it continues to encourage such behavior from the debtors. Why settle for a loss when you don’t have to?
  • Most debt collection agencies work on a type of commission base. If you don’t get paid, then neither do they. By billing you a percentage of what they collect, you can be assured they will do their best to collect as much as possible. Even after covering their fees, collecting some of the funds is better than collecting none. Furthermore, you can read our articles on this website to know more about accounts management in your business. Do not forget to check that out!