Proactive Strategies for Preventing Debt Collection Disputes

In the ideal consumer scenario, someone agrees to make a payment, and then they do. In another optimal example, a company agrees to cover their employees’ ongoing education, and that employee works there happily for years, offering improved services and skills.

In short, debt collection agencies are only necessary when something goes wrong, which happens often enough. When, not if, something goes awry, Summit Account Resolution is here to help make things right.

But what steps can businesses take to maximize the odds of preventing debt collection disputes from arising? There are pitfalls, so avoiding debt collection mistakes is vital. But please read on for a few concrete ideas that can help.

Clear Policies for Employees

One area where employees can drain company resources involves business expenses. The ambiguity surrounding what does and does not constitute a business expense increases the odds of mistakes here. Employees must also understand the process for being paid back or how to charge the company for business expenses incurred.

The more clarity there is for employees making purchases using company funds needs, the less chance there is for something to go wrong. No amount of clarity here will prevent an employee intent on exploiting this system from doing so, but it could prevent confusion or an accident.

Transparency Upfront for Customers

It’s essential to make customers aware of all the terms and conditions before they commit to making a purchase. In some cases, companies make long, clunky legal documents for customers to sign. These contracts make the customer legally beholden to the company in certain respects, but they aren’t very transparent. One of the reasons companies use them is they are so long and dense. They know people will just sign them before reading them in full, or at all.

When everybody is on the same page at the outset, they’re likelier to stay that way. Businesses may feel tempted to tilt contracts in their favour using underhanded tricks, like making them prohibitively long to the point people would rather just sign them without reading them first.

If you do this, customers may be surprised and upset down the road. Of these, some will begrudgingly make the payments and perhaps harbour some resentment over the circumstances of the confusion. Others will delay the payments or perhaps try to avoid them entirely.

Summit A*R is a full-service debt collection agency that can help collect all types of debts in every industry. We’re there for any of your needs, but being upfront and transparent with customers can help you sidestep problems altogether.

Flag Overdue Accounts

Sometimes people who owe you money aren’t aware that they do, or they just need a little nudge. Before calling in professional debt collectors, it’s wise to check in with the debtor and see where they’re at.

Try to tackle overdue invoices within the first 45 days, as a debt is considered “bad” after going uncollected for 60 days. How you engage your customers in this may reflect your unique relationship with each of them or the overall character of your business. There are no hard and fast rules because they should reflect the personality and nature of your company.

There could be practical, reasonable reasons why the payment didn’t come through. Perhaps there was a problem with the invoice, or the goods weren’t delivered, or reached the wrong address. A glitch in their accounting services might account for the problem. If they have a cash flow problem, they could be very willing to abide by a different payment schedule.

You might feel disappointment or anger at not being paid, but don’t let your first reactions dictate how you respond. There’s a real possibility of resolving the situation promptly and amicably, so you and your customers or clients can have a positive working relationship moving forward.

If you assume the worst and come at them aggressively, you could sully the relationship over nothing. Indeed, Summit A*R has a PHD philosophy, which stands for preserving human dignity. Even when we’re dealing with a bad debt, we never use hostile or aggressive methods to recoup it.

We manage to double the industry’s standard rate without ever using tactics like robocalls. Give your customers and clients the benefit of the doubt and treat them with kindness and respect. If it turns out that there is a problem, we’ll take over, but we’ll treat them with dignity, too.

Should You Walk Away from a Bad Debt?

Some debts are worth pursuing, and others may not be. If it’s a very small debt from an old, reliable customer or client, pursuing it may be worth more trouble than it’s worth. Then again, good, reliable customers aren’t likely to leave you hanging with an unpaid debt.

A professional, ethical debt collection service can help you save face and keep relationships positive by stepping in there to recoup the money for you. We have decades of experience and training in negotiation and will work hard to get your money while putting a friendly face forward.

If the debt is relatively small and could be more trouble than it’s worth for you or your HR to chase, you may consider whether it’s even worth pursuing. If it’s not, put an asterisk next to that client so you’re mindful of past transactions because you don’t want to get burned again.

However, if the debt is large but seems hard to recoup, call us and get working with effective debt collectors today.

Pre-Collections

Sometimes companies want to focus hard on what’s ahead and streamline payments as much as possible. We offer pre-collection services that outsource your busy work and take care of it properly.

Summit A*R is happy to recoup money that was owed long ago or do the collecting for you in the first place. We’ll help you avoid the problems that come with bad debts by handling it ourselves.

Running a business smoothly is all about keeping up a strong pace moving forward. It’s hard to do that when you’re looking backwards for money that should be in your account but isn’t. If these solutions don’t eliminate your bad debts, call Summit A*R today.