Though you always hope your customers will pay their bills on time, delinquent debtors are an unfortunate but normal part of doing business. You can take steps to protect yourself and your company, however. At Law Offices of Alan M. Cohen LLC, our experienced commercial collection attorneys have been helping businesses recover debt since 1994. We are familiar with every legal option you have in Massachusetts for collection and offer the following tips for collecting on delinquent accounts:
Start with a strong credit application
Granted, you really need this tip in place before your customer defaults, but it is an important step for your business’s financial health. This is especially true if your business revolves around continued credit and ongoing deliveries of goods or services. Your credit application should include:
- Your customer’s bank information
- An interest rate for late payments/ minimum default interest rate
- The legal power for you to pursue payment
- A personal guaranty
- Attorney’s fees clauses and jurisdiction
This information will not only help you select customers with good credit but will also help you pursue payment in the case of default.
Send proper invoices in a timely manner
Send your invoices on time and make sure they are accurate. Any inaccuracy can slow down the entire process. Your customer will use a mistake on your part to delay payment, and perhaps with good reason. Your invoice should be detailed, yet easy to read, with payment information clearly spelled out.
Communicate formally and frequently
Start with a polite letter to remind your customer they are overdue. Mistakes do happen and bills get lost in the shuffle. You don’t want to alienate a customer if you do not have to. That being said, if the problem persists, keep contacting them in writing and follow up with a phone call. Track any communication you send or receive. Be prepared to work with them. Your goal is to get paid, so refrain from threats and try not to get angry. You may want to involve an attorney if you are negotiating a payment plan.
Consider your legal options
If your attempts to recover the debt on your own simply are not working, you should consider your options through the legal process. There are many ways to pursue a judgment against a debtor, but you will need the help of your lawyer, which brings us to the final tip.
Reach out to a knowledgeable law firm
Although you can take many steps on your own to protect your business, certain situations require the help of a skilled commercial collections lawyer. The attorneys at Law Offices of Alan M. Cohen LLC have nearly 50 years of combined legal experience helping businesses get paid the money they are owed. When it is time to pursue legal action, call our office in Framingham at 508-763-6604 or reach out online.