Whenever you have past-due accounts, the first thing to do is contact the customer. In this article, we’ll discuss the importance of reaching out early in commercial debt collections, understanding the customer’s reasons in the hope of resolving them, and documenting them in case you need to file a lawsuit.
Reaching Out Early To The Customer In Commercial Debt Collections
Reaching out early is crucial in commercial debt collections. Once an account is a couple weeks late, call the customer (don’t write), mention the past-due invoices, and politely ask if there’s a reason they haven’t been paid.
If there’s a misunderstanding or something you can fix, nip it in the bud. Whether you resolve the issue or need to file a lawsuit, the sooner you act, the sooner you’ll get paid.
Understanding The Reasons For Nonpayment In Commercial Debt Collections
In general, there are 3 basic reasons for nonpayment in commercial debt collections: either the customer can’t pay, it doesn’t want to, or it genuinely disputes the charges. But maybe it was just an oversight and the customer forgot to pay. You won’t know unless you call.
If the customer’s acting in good faith, try to work things out. If it ignores your calls, if it doesn’t want to pay, or if you just can’t work things out, then you’ll probably need a lawsuit to get paid.
Documenting The Reasons For Nonpayment In Commercial Debt Collections
Finally, whatever the customer tells you, memorialize it in an email. For example, if the customer says it can’t pay due to cash flow issues, it may later change its story and deny owing the money. If you need to file a lawsuit, you’ll want a contemporaneous email memorializing your call as evidence of the customer’s position.
In commercial debt collections, reaching out to the customer will help you determine which cases warrant a lawsuit, which don’t, and which you can resolve amicably. And the sooner you address these issues, the sooner you’re likely to get paid.
For more information on commercial debt collections, or if you’d like to discuss a specific collection issue, call me at 856-667-1669 or contact me here.
This material is for informational purposes only and should not be construed as legal advice. No person should rely on this information without seeking the advice of an attorney.