When Dealing with Debtors, Find the Right Balance

Your customer wanted to buy a product or a service from you. They happily agreed to the terms and conditions. Your company used its valuable resources to deliver on time as per specifications. You sent an invoice and it wasn’t paid. But you weren’t worried because many customers don’t pay immediately. So, you sent a reminder. But it was also ignored.

After waiting patiently for a few days, you contacted your client and politely inquired about the payment. You were given an apology and were promised to be paid by a certain date. However, that deadline was also missed.

As your local debt collection agency that serves many sole-proprietorships and small businesses, we understand how frustrating it can be to wait for an unpaid invoice to be cleared. You have operational costs that must be met. You also dedicated your time and skill to fulfill your end of the bargain.

For tips on how to get your invoices paid faster, check out this great resource on our website. By following these six ideas, you can improve the effectiveness of your collection process. However, even with the best strategies in place, you may still have to deal with a client who can’t or won’t pay.

Various statistics to show that debt grows harder to recover with time. Here are a few reasons why the longer you wait to pursue a debtor, the more difficult it can be to collect:

  • They may be ready to declare bankruptcy or insolvency, in which case there are fewer options.
  • They may be about to skip town and it will take resources to track them down.
  • They may be about to cross state lines, where local laws can vary.
  • They may have limited funds due to unforeseen financial problems. If you wait too long, you may be beaten to the punch by other creditors.
  • The statute of limitations can pass on a debt. Depending on the state, this can be in the range of three to six years, though some agencies are given more time by the court.

When dealing with a delinquent account, it’s important to find the right balance. As a personal debt collection agency with decades of experience and a great track record of having recovered some particularly difficult debts without damaging a client’s valuable relationships or their reputation, we urge customers to not waste time when recovering revenue.

Even if the debt is older, as a highly resourceful collection agency, we can still collect your revenue at Summit A*R. We have a cutting-edge skip tracking department led by an experienced and clever private investigator who can track down debtors and their assets. We’re also knowledgeable about state laws and can find the right strategy to recover a debt in another state.

What’s more, we have access to a full-service litigation team that can help you pursue difficult-to-collect accounts through the assistance of a qualified legal team. First, our licensed private investigator completes an exhaustive financial investigation of your debtor. Once this cost-benefit analysis is complete, we approach you for written authorization and payment of the upfront legal costs for our affiliated attorneys.

However, it often doesn’t even have to get to this point, even with older debt. We have the power of credit bureau reporting. The average person or company are more likely to pay their debt when they realize that their credit rating can be negatively impacted.

One of the reasons why delinquentcustomers ignore invoices, reminders, emails, phone calls, and demand letters from you or your in-house accounts receivables department is that they know you’re unlikely to report them to the credit bureaus. Without this valuable collection tool, you may be toothless in front of a debtor determined not to pay their dues.

The best thing about our credit bureau reporting is that it is done promptly at no additional cost to you. Moreover, our reported accounts are Fair Credit Reporting Act (FCRA) compliant. However, if you’re uncomfortable with this for any reason, you can opt-out of this service.

Although we believe that our clients should take swift action against a debtor because statistically, debt is harder to recover with each passing minute, we also acknowledge that it’s important to find the right balance.

Your goal is to recover your payment without intimidating or harassing your customer, regardless of how frustrated you feel. Finding the right balance between being friendly and professional can be tricky. There is a fine line between being stern and threatening. The former can help you get your money, while the latter can have the opposite effect and result in fines.  

If your debtor is an older customer with some temporary financial problems, then you want to give them time to retain their business and to preserve your reputation. Yet, you don’t want to give them too much time, or it may affect your operation.

Like a trapeze artist, at Summit A*R we know how to walk this fine line. While we follow a P.H.D. Philosophy” (Preserve Human Dignity) and treat everyone with dignity and respect, we also remain firm and rely on our skilled negotiation technique because we know how important relationships are to our clients.

That’s why we encourage you to take advantage of our account receivable (AR) consulting service. Here, our AR management professionals will help you learn how to increase cash flow, customer retention, and reduce bad debt loss while maintaining your reputation and valuable connections. It’s important to find the right balance when collecting debt because you never know if your debtor will become your most valuable customer.

We also offer pre-collection services where you can outsource your AR cycle to us. As the owner of a company, you have enough on your plate. You are trying meet your operational costs, turn a profit, and plan the growth of your company. You may not have the time to learn the fine dance of debt collection, so partner with a team of trained specialists who have been doing it for decades.

On our website, you’ll find feedback from many clients and debtors who are happy with our diplomatic yet effective approach. We’re also proud to be rated A+ by the Better Business Bureau. The rating wasn’t an accident. We live up to our word by adopting ethical debt collection strategies.

So, give us a call, send us an email, or request a callback. Our friendly collection experts will be happy to offer a free no-obligation consultation. Get in touch with Summit A*R and let us put your accounts back in the black.