Online Debt
Collection; Debt Collection Letters
By Jim Kesel
Past due accounts receivables are
a constant problem with many businesses especially during any economic
down turn. Sometimes the time and effort to get paid will exceed that needed to
make your business grow and function efficiently. This makes an efficient
system of contacting your past due accounts very important. There are basically
four stages of debt recovery that are employed by businesses.
Initially a business that has past due account receivables
will use its own resources to contact the customer. In most cases this is done
with debt collection letters. Normally the
first collection letter is sent out within 15 days after an account is past
due. This is normally a gentle reminder that the account is past due and a
request that they contact your business if there are any questions or they need
assistance.
Second debt collection letters
are normally sent after another 30 days have passed and the customer has
not made contact with you. The letter should again state the amount that is
past due and how long it is past due. Enclosed with the letter should be copies
of the original invoice. Again you should urge the customer to make immediate
contact with you. Offer incentives to make the payment and let them know that
you are willing to work with them. Note that failure to take action could mean
filing a report with the business credit bureau or turning the account
over to a collection agency or a
lawyer. Always include a self addressed envelope with a stamp to encourage a
response.
If the past due account does respond to the second
collection letter it is a good bet that further debt
collection letters and contacts will be unsuccessful. You may consider
using the telephone to contact the customer however you must be well prepared
with a script that keeps you focused on the collection process. In most cases
unless you have had the proper training telephone collections are best left to the
experts.
The next step in the collection
process is to employ a collection agency to recover your past due
accounts. Collection agencies are expensive to use many times requiring large
upfront fees. Online debt collection agencies are much less expensive many
times costing less than 10 dollars per collection effort. In addition online
debt collection allows the business owner to recover more of the debt and
control the collection process from the businesses computers. Essentially an
online debt collection agency uses professional debt collect letters to begin
the collection process. Getting a collection letter from a professional
collection agency has a chilling effect on most past due account holders.
If the efforts of an online debt
collection agency are not effective then your only recourse is to sue
the debtor. In many cases you can file in small claims court and manage the
case yourself. However if the debt is substantial you will need the skills of
an attorney to effectively sue the debtor. Obviously this is a very expensive
option and thus the amount of the debt must be substantial to make the process
worthwhile.
Whether you use an online debt collection agency, the courts
or do the collections in house the process of collections is expensive and time
consuming. Focusing your efforts through an
effective process will help reduce the cost and increase the
collection of your accounts receivables
About the Author: The Online Debt Collection Website is
located at http://www.onlinedebtcollectionhelp.com.
We help your business collect its past due accounts using debt collection
letters and online collection agencies. Source: http://www.isnare.com Permanent Link:
http://www.isnare.com/?aid=255754&ca=Business+Management
