How to Approach Debt Collection in your Business

Those businesses that offer credit services to their customers understand the serious negative impact a defaulting debtor can have on your business; but in today’s competitive market, few can afford to turn away customers who seek credit from a company. Whether big or small, each credited transaction puts your business at a certain amount of risk, which is also why these businesses often take debt collection fairly seriously. Though going about debt collection, the wrong way can have seriously negative implications for your company, which makes it essential for each business owner to understand best-practices when it comes to debt collection, so as not to harm their reputation while still being able to recover what it owed to them.

Make use of a legal firm that you trust

For starters, you should have a legal firm that specialised in debt recovery handle your collection for you. When selecting a firm, make sure that they operate according to best practices, so don’t be afraid to ask them for information on their procedures. Different firms offer their services at varying prices and quality, so shop around if you don’t already have an attorney in mind. Under no circumstances should you opt for the aid of an institution or individual that does not have the correct qualifications, unless you fancy finding your company embroiled in a legal battle later on.

Intimidation is always out of the question

Remember that this is not Hollywood, and in today’s world intimidation tactics, or those that embarrass, harm or undermine the rights of your debtors in any way- shape or form, will land you and your collection agency in seriously hot water, and will almost certainly destroy your company’s reputation; so, you should never stoop to such methods no matter how tempting it may seem.

Make no use of false summons to legal action

Neither you nor your collection agency should issue notices of legal action if you have no intention of taking it. In most circumstances this can be considered by your debtor to be harassment, which means that he or she would be able to take appropriate action against you and the collection agency.

You are responsible for collection fees, not your debtors

Remember that your collection agency is providing you with a service, and not your debtors. This means that you and your company are fully liable for the fees to be paid to the collection agency you are using, and not your debtor. They are only responsible for what they are indebted for, including any present interest; but certainly not the collection fees.

Contact Scheepers Pretorius Attorneys today

If you would like more information on how we can help your company recover bad debt, contact a consultant from Scheepers Pretorius Attorneys today, or visit our website for further information on our various, specialised legal services.