How Do You Currently Collect Your Commercial Debt?
No doubt your business plan is based on receiving payment for goods and services. Unfortunately, the inevitable can happen. When clients don’t pay their invoices, your bottom line will be adversely affected. Do you currently have a plan in place to collect your commercial debt? If not, you should consider it.
It doesn’t matter what type of business you are in. Maybe you are a medical provider and patients assume that the insurance company paid you enough. It’s even plausible that the insurance carrier is waiting for the patient’s response that they have no other coverage and the patient never bothered to open an envelope. For the time being, your medical or dental practice could be faced with uncollected debt.
Perhaps you have a policy that is directly written on supply invoices that state “within 30 days due net.” This could translate to an expectation that payment will be made within 30 days of a receipt of goods or an invoice. Meanwhile, sixty days later, you are wondering if you’ll be able to collect on the bad debt.
Commercial Debt Collections
Do you have a plan in place concerning the collection of a business debt? As you most likely know, there are three basic ways to find the means to work on getting paid. Here’s how they break down:
- Internal Collection Department – You may decide to assign collection efforts to an internal collection department. This suggests staffing concerns. It is also imperative that your company knows the legalities in attempting to collect bad debt. Additionally, if the matter needs to proceed to court, you will most likely need to retain legal counsel.
- Outside Collections Agency – In many cases, outside collections agencies charge a percentage in collecting outstanding payments due to your office. In some instances, they may offer to “buy” the bad debt. You need to evaluate the economics of the situation. Also, you may still need to speak with an experienced collections attorney if a lawsuit seems to be the only alternative.
- Collections Attorney – Collections attorneys with experience in commercial debt are often your best choice. For one, if they’re also your business lawyers, they understand how your company operates. Undoubtedly, they have been careful about the collections language contained in your sales contracts. Next, they know the confines of the law when it comes to collection letters and calls. Lastly, there’s the obvious. When it comes down to it, a collections lawyer can file a lawsuit and pursue a judgment.
It’s up to you to determine how you think it’s best to pursue collection of your business debt. You should also decide if there’s ever a time to write off smaller invoices.
At Manfred Sternberg and Associates, we assist all size companies with collection efforts. This can be done with or without our business representation. Are you concerned about uncollected debt? Call us to see how we can assist in getting you paid for your hard work and goods.