As any business owner knows, having a debt recovery plan for when clients can’t (or won’t) pay is an integral part of running a successful company. Unfortunately, unpaid debts are rampant throughout the United States. In fact, a Business Insider report from 2010 found there was around $2.4 trillion in consumer debt with one-third coming in the form of “revolving debt” (i.e., credit cards, debts not secured by a home or other form of collateral).
That’s $792 billion in debt that runs the risk of going unpaid. While there are many articles and plans and seminars for the consumers who owe the debt, there isn’t as much attention given to you, the business owner.
Unpaid debts can greatly affect your livelihood and the lives of your employees. To help you fight back, here are five debt recovery tips that should get you more of the payments you deserve.
Outsource the Work
Collecting on delinquent debts keeps part of your business stuck in the past. You’re better off servicing the clients and customers you know will pay. Therefore, it’s a good idea to outsource this aspect of your business to a company with notable experience.
Look for Fixed Contingency Partnerships
When trying third-party debt recovery solutions, you should look for fixed contingency partnerships. That is, partnerships that cost you nothing upfront. The only way you pay is if you get paid. That’s a principle we’ve believed in here at Southwest Recovery Services for over a quarter of a century.
Be Aware of All Credit Reporting Agencies
Part of the leverage you have as the debtor is the ability to send delinquent accounts to collections. The threat of that can get many clients to pay up. But make sure the company you’re doing business with doesn’t stop at just one. There are three mainline credit reporting agencies in the U.S. (Equifax, Experian and TransUnion). An account should be referred to all three; otherwise, the possibility of sending to collections won’t be as great of a motivator.
BONUS TIP: This isn’t an overly intensive process for the agency. We provide this reporting service for no extra charge.)
Remember That Collection Laws Are Federal, State and Local
Federal laws always take precedent whenever there is conflict, but it’s important to be mindful of all three — or make sure that your third-party debt recovery service is — as you are otherwise bound to compliance across each level of government.
Be Willing to Defend Your Case
Sometimes legal action is necessary. Southwest Recovery Services emphasizes this aspect of debt recovery because it’s important to protect your financial interests in a court of law to avoid the pattern of non-payment. If non-payers know you will fight for what’s yours, they’ll be less likely to violate repayment policies.
If you need a turnkey solution that can help you navigate each of these areas, stop by our multiple offices today, or contact us online or by phone. We look forward to helping your business get the payments that it needs to stay healthy.