Unpaid invoices are bad news for any business, as you need a steady cash flow to stay afloat: you need to have funds to pay your expenses, including suppliers and staff. It is, therefore, imperative for businesses to recover debts after a certain period of time. But when should you send someone to collections? The team at Coast To Coast Financial Solutions advise you to ask yourself the following questions to find out:
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Is the Invoice More than 90 Days past Due?
There are no specific rules for sending someone to collections. It all depends on how long you are willing to pursue this debt yourself. Your business may not suffer if someone doesn’t pay for a year or more. Still, the general advice is that if an invoice is more than 90 days past due, the creditor should initiate a placement with a debt collection agency—especially if the customer does not respond to your attempts to resolve the debt.
If you’re hesitant to hand over the account to a debt collector, know that debt recoveries don’t have to be unpleasant. To preserve your relationship with the consumer, find an experienced and professional collection agency that will work with the customer to find a solution, so you are more likely to recover the debt faster and, at the same time, retain the customer.
Is the Customer Still Taking Your Calls?
If a customer who owes money suddenly becomes unavailable (not returning your calls or having their phone and fax disconnected), it’s almost always a red flag. A lack of response to collection calls and letters indicates a lack of concern on their part. If a consumer refuses to call you back after repeated attempts to reach them, you know it’s time to send an account to collections.
However, if the customer does return your calls but your negotiations are going nowhere, it’s also something only a collection specialist can help with. Sometimes, customers delay the payment by asking for additional documentation or simply promising to pay without any real commitment. If you are dealing with all this yourself, you’re wasting your time!
It is essential to turn the account over to reputable collections agencies. Experienced debt recovery specialists are trained to deal with customer excuses and have access to software and data that help facilitate the debt recovery process. They are also up to date with the latest regulations, so you can be confident that they will collect the debt in a lawful manner.
Is the Customer Still Using Your Services?
If the customer always paid on time in the past but suddenly stopped using your services, you should be on your guard. Not using your services may indicate that it’s no longer in their interest to pay. However, if an invoice is overdue but your customer is still using your services, it’s a sign that the problem can be resolved quickly.
In either case, it’s advisable to wait until the 90 days mark before sending the account to collections. Be sure to hand it over to professionals trained to resolve the debt quickly while preserving the relationship with the customer.
Is This the Only Unresolved Dispute on the Account?
Customer disputes are nothing out of the ordinary, but there are also those customers with many ongoing disputes. Of course, customers have every right to dispute the delivered products and your terms of sale, and express dissatisfaction with how you conduct business. However, such disputes can usually be settled quickly. But if the customer is not willing to cooperate despite all your efforts, it may be a tactic to delay payment.
The key is to know when to stop trying to resolve the dispute so that you don’t waste any more time. If the customer refuses to cooperate with whatever solution you offer, it’s time to send an account to collections. Any professional debt collector has the training and communication skills to handle complex customer cases. Being proactive and turning the account over to a debt recovery agency will free up your mind and your time so that you can focus on your business!
Finding a Professional Debt Collection Agency Near Me
While there are no set rules for sending someone to collections, you don’t want to wait for overdue accounts to take a toll on your business. If you are not getting results collecting unpaid debt on your own, entrusting the process to debt recovery specialists will free up your time and help ensure the steady cash flow your business needs to operate.
Coast to Coast Financial Solutions is a debt collection agency helping clients recover unpaid debts for over 65 years. Our experience in the industry enables us to work in a professional and timely manner and in compliance with regulations.
Coast to Coast Financial Solutions can help you implement effective debt collection strategies. Call our debt collection specialists today at 805.506.8195 or contact us online to learn more about our debt recovery services.
One can consider alien to be a type of security interest which has been granted over an object or property for securing the payment of any particular debt. These phrases are used interchangeably in the US; however, in other nations around the world, a lien is related more to real property as compared to personal property, where we usually define the security interests as a security agreement intended for debts having secured loans. The borrower collateral will be able to use these sorts of agreements for making sure that they are compensated even though you do not have sufficient cash for it–which includes repossessing any real property based on the type of lien and the debt. 
