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Consumer and Commercial Debt Collection Florida

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Debt Collection Tips and Strategies

Thursday, September 27th, 2018 | The Cash Flow Group | No Comments

Strategies For Improving Collection Rates – PROVEN!

The Cash Flow Group in Miami

 

Debt collection tips from The Cash Flow Group – Taking a few safeguards can improve your success when collecting on your receivables. I have found that basic strategies are usually the most effective. In order to increase the effectiveness of your collection process, you should:

1. Have a Written Credit Policy 

Follow this on a consistent basis.

2. Know Your Customer

Is your customer an individual, a sole proprietor, a partnership, or a corporation? Businesses often use fictitious names and acronyms for their businesses. It is important to clearly establish who is responsible for the obligation.

3. Plan for Collection Problems Before They Happen.

Your credit agreement or application should provide for provisions for attorney’s fees, interest at the highest rate allowable and late charges for a delinquent account. In order to recover attorney’s fees, most courts require a written agreement signed by an authorized representative of the customer.

4. Use Personal Guarantees 

Especially when you are dealing with new companies that do not have a credit history and will try to escape personal liability by creating a corporate account.

5. Have a Detailed Credit Application

All of the above, and more, should be contained in a comprehensive credit application

6. Obtain a Security Agreement

An agreement that can be used to create a lien on the equipment or merchandise sold to protect you in the event of a default or bankruptcy filing.

7. Keep all Correspondence Between You and Your Customer

Letters or emails received from your customers may admit the liability in question. Phone conversations should be followed up with a letter or email confirming the conversation. A letter or email received from your customer that you do not agree with should be responded to delineating the reasons for the dispute. Most importantly, once an account is in dispute and the customer has defaulted you must act quickly. The age of the account will be one of the main factors that will impact your ability to be able to collect. Statistics show that 90 days after the account is past due, you have less than a 75% chance of collecting it. The percentage quickly shrinks every passing month and after 12 months, there is only a 25% possibility of collection.

Get a hold of us at the Cash Flow Group with any questions or concerns.  We are here to help!

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The Cash Flow Group, Inc

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