The adage about an ounce of prevention being worth a pound of cure holds true in the business world — especially when it comes to debt collection. Having an unpaid bill is more than just frustrating, it hurts business. It takes time and effort to collect the debt that could have spent on other endeavors.
Business owners can reduce the risk of these issues by taking proactive steps to better ensure they receive the agreed upon payment. The lawyers at the Law Offices of Alan M. Cohen & Associates LLC have over fifty years of combined experience with commercial collection and can help your business recover debt. We are familiar with the legal options available for these efforts and will use them to help your business.
Three tips that can ease the way to success when you need to collect on that debt include the following.
#1: Have clients complete a credit application
This is particularly important for ongoing relationships. A credit application provides an opportunity to gather information about the client to protect your financial interest. This information should include the company owner’s name and contact information, a stated interest rate if the payment is late, banking information, and legal clauses to explain what will happen if the client is in arrears. This should include a provision to cover attorney’s fees and information about which court will have jurisdiction in the event you need collection efforts to escalate to litigation.
You should not use a boiler-plate fill-in-the-blank pre-made forms to achieve this goal. You can have these documents tailored to your needs. This can better ensure you enter a beneficial relationship with the client/customer and have everything you need in the event you need move forward with collection efforts.
#2: Document everything
Take the time to get copies of the paperwork related to the relationship. This should include a copy of the credit application discussed above as well as pictures of checks the client sent with partial payment or screen shots if the client used online accounts.
There comes a time when collection efforts are best left to the professionals. The attorneys at the Law Offices of Alan M. Cohen & Associates LLC can use their almost 50 years of combined legal experience to help your business get their due payment. When you need help collecting your bad debt, call our office at 508-763-6604 or reach out online.