It is well known that business is a risky sphere. Every manager wants to know in advance which problems and risks his company will be faced with. One of the main tasks of any company and of the management in general is to reduce risks to a minimum by means of securing effective functioning of production, market research and legal ways of carrying on the business.
Does a person or a company owe you a specific sum of money? Have you been waiting for this sum of money in vain to be paid back? Unfortunately, this kind of situation occurs very often and it is a big problem for a businessman when he faces the failure to pay.
So what are the legal ways of getting back the money that you are owed? What steps should you take in order to stay legal and without getting into a conflict? This article deals with the debt collection strategies and the certain pieces of advice about forcing customers to pay for delivered goods and services.
Usually the process of collecting debts owed to you is not a pleasant one both for you and for your debtor. There is a sharp edge of being rude or being soft. If you are too soft, there is a chance to delay the process of paying back. If you are too insistent or even rude, your debtor can find lots of pretexts for avoiding you and as result the process of paying back can also be delayed. All in all you have to be flexible, firm, pushing and quite insistent in order to have no trouble in getting what you are owed.
Evaluate the situation. First of all, before going further and take some steps, you should evaluate and examine the occurred situation carefully, as it is really easy to ruin a business relationship due to being too unreasonable with collecting outstanding accounts.
Contact your debtor. Business is a risky affair, so there could be a lot of excusatory reasons for why you have not been paid back the money you owed. So before taking any legal actions, you should contact your debtor and discuss directly the occurred situation: reasons for non-payment, debt payment terms, undertaking of obligation, etc. Your first contact is like a reminder for the debtor that the bills have not been paid yet and you are still waiting for an amicable settlement of this situation. The most effective way is to meet your debtor in person. You can also make a phone call or write a letter, but remember that a face-to-face contact gives you lots of advantages and chance to get your money as soon as possible. At this stage you have to remind the debtor how much he owes you, the date you loaned this sum and when you expect it to be paid back. You can also take a witness with you if there is such a possibility. At this point a certain percents of debtors try to repay the owned sum of money at once in order to save face and preserve reputation of a good partner.
Contact influential people. If nothing of the above mentioned works, you should definitely contact someone who has an influence upon the debtor. In this instance you should let your debtor know that you need the bills be paid and till now you are not going to bring legal actions against this subject.
Still no success? Are you still unable to collect the debts even after various requests and reminders? Now it is time to send a formal letter via registered mail that includes names and addresses of the debtor, all the documents related with the debt, the final date when the payment can be made and a notice that in case of not receiving the payment back, you will take this matter further by bringing legal actions or contacting a collection agency. You can also contact you debtor through your lawyer and, as a rule, this kind of action is considered to be effective so far as nobody wants to deal with courts.
Refer to the contracts and obligations. If you do not want to have any financial problems with your partners, you should make a contract with them stipulating terms and payment amount in advance. It is very important to have as much evidence to show that you are owed the money as you can. Make it a rule to keep copies of letters, emails and other documents concerning business matters. The more evidence you possess the more chances you have to get your money back.
Taking the matter to small claims court. If you have done everything mentioned above but there are still no results, it is time to take this matter to a small claims court but only if there are quite enough necessary proofs. It is a simple procedure and you do not need an attorney for this kind of affair.
Mediators and collection agencies. Instead of going to court you can resort to the help of other debt collection strategies such as mediators or debt collection agencies. Mediators are engaged in order to resolve disputes outside the court. Debt collection agencies are hired in order to pursue the money that you are owed.
It is very important to stay calm and not to make any threats as your business should be within the law. You should not resort to the help of non-traditional business methods because afterwards you can be accused of extortion.
If your debtor offers you a partial payment, it is better to accept it in any case. Always demand the whole amount, but be ready to accept any offer from other side and maybe to divide payments into some equal parts for debtor’s convenience and your calmness.
Remember that nothing is impossible and even incorrigible defaulters can be collected but you should follow certain debt collection strategies that will definitely help you in getting back your money.
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