How To Do Debt Collections

Debt Collections is a necessary part of running a business as we all know that money is the lifeblood of all businesses. Here are ways to collect debt.

Step 1) Start collecting debt when your customer is 30 days overdue. Do not wait until 60 or 90 days. You are providing a good product, a good service, and you should be paid on time.

Step 2) When your customer is 30 days behind, send them an EMAIL and LETTER. Yes, send them both!
Make the email and letter slightly light hearted. Simply ask them to give you a call in the office to remit payment as soon as possible. This will eliminate a significant portion of your business debt.

Step 3) If you don't receive a response from the letter and email, and the customer is now 60 days overdue, make a PHONE CALL. Explain to the customer over the phone that they need to remit payment over the phone via credit card--work out a payment plan with them if necessary if they can't afford the whole balance. If the customer is uncompromising, tell them you will be turning their account over to a debt collections business which is the final step in collecting debt. Debt Collections businesses typically charge 30% of what they are collecting but are necessary often times when you have a difficult customer. Use debt collections businesses as a last resort.

If you found this article helpful, check out more of my business articles and business how to books at the following links:

http://www.lulu.com/content/paperback-book/how-to-start-a-debt-collections-business/7034889

http://www.ehow.com/how_5111842_responsible-debt-collector.html