Business Debt Collection Ideas PLP Law Attorney

How a Business Can Improve Debt Collection

One of the most frustrating areas of maintaining a successful business is collecting on receivables. It has been said that “a sale to a customer is no more than a gift, until the payment for it has been collected and gets deposited in the bank.” Many businesses learn this truth the hard way, generating great sales and revenue, but suffering from terrible cash flow because payments due are not forthcoming in a timely manner.

Improving Debt Collection

Debt collection on accounts receivable can be even more difficult when payment disputes come into play, and it may even come to the point where you might need a Bay Area commercial attorney to represent you. Before it comes to that, try the following tips for debt collection:

  • Proactive invoicing – keep invoices clear and readable, with no room for misunderstandings or disputes
  • Focus on past-due receivables – don’t let past-due receivables go un-noticed, or they may never be paid at all
  • Consider payment plan offers – if you have clients who are past due, perhaps with cash flow problems of their own, you might want to offer them a payment plan, which is far better than having an invoice go completely unpaid
  • Early payment discounts – consider offering customers a discount tied to how early they pay invoices, for instance an invoice paid within 10 days might qualify for a 2-3% discount
  • Use an aging report – an aging report will provide you with a concise picture of which customers are late with payments, and how late they are, so that you’ll know which ones should be prioritized
  • Cash management tools – work with your bank to provide various payment options to customers, like credit cards or automated clearing house (ACH) transfers.

We advise our business owner clients to track all conversations with customers carefully, without relying solely on verbal communications. In disputes where a significant amount of money is involved, you should channel all communications such as dunning letters through your commercial attorney to have the best chance of monetary recovery.

When Disputes Do Happen, Contact a Bay Area Law Firm

Despite your best efforts to the avoid them, payment disputes will occur, and it might then become necessary to secure representation by a knowledgeable and competent business attorney. To work with the best resource for handling such business issues, call us at 510-881-8700 or visit us online. Whether in Castro Valley, Dublin, Pleasanton, Oakland, or California generally, you couldn’t make a better choice than Poniatowski Leding Parikh Law Corporation as a partner in resolving business disputes.