Debt Collection Recommendations

Drafting Debt Collection Letters That Get You Paid

As recovering debts in an efficient manner saves you time, money and stress, drafting effective debt collection letters is an important part of your business processes. The difference between letters that fail and those that succeed could be the difference between your business working in the red or the black.

But before discussing what a good debt collection letter should contain, it’s important to cover what it should never include. The constraints of privacy and debt collection laws require that your letter:

  • Does not contain anything that could be construed as harassment (this includes the frequency of your letters)
  • Is not misleading (i.e. stating consequences that will not happen)
  • Does not embarrass, frighten or intimidate the debtor.

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Why Face to Face Debt Collection Works

There are few things more perilous, frustrating and difficult for a business than its customers failing to pay for products and services that have been provided on credit. Particularly in difficult economic times, when cash flow is reduced and a business is subjected to an extensive range of financial pressures, trying to recoup funds from debtors that are reticent to pay is a stress and additional pressure that few businesses have the resources to address. For this reason, debt collection services can offer invaluable support and represent the best possible chance for your business to receive payment for the debts it is owed.

Debt collection agencies offer knowledge, skills, experiences and resources that are required to successfully negotiate the recovery of debt. The areas of specialty that are offered by professional collection agencies are rarely found within other organisations, and so internal efforts to try to recover debts are rarely as successful as the strategies and approaches used by dedicated and credible debt recovery services. Essentially, working with a debt collection agency can be the key to helping your company remain profitable for years to come, and the fee they charge will represent a great investment on the part of your organisation.

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6 Recommendations for Improving your Debt Collection

Debt collection should be seen as part of the regular operations for any business. If you have outstanding accounts that never seem to get paid you may need to look at your existing accounts receivable procedures.

All financial procedures and policies need to be continually updated with the aim of improving the existing systems. These recommendations for improving debt collection should be seen as a starting point to get your aged receivables within a 30 day (or your required) turn around.
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