Problems with cash flow? 3 debt collection techniques that can improve business results "

Effective techniques for debt collection are necessary for any company, regardless of economic climate. Knowing how to reach your customers to pay their debts in arrears in time will increase cash flow. After all, a business, you have to pay their debts. In the absence of sufficient cash flow, risk of falling behind in their obligations, leading to problems with suppliers and / or loss of conditions easy credit with your bank orlender.

Learn to master the techniques of debt can mean the difference between surviving and thriving in your business.

Here are three techniques for collecting the debt to improve cash flow business:

1. Payment terms change

Be sure to indicate clearly on all invoices and budgets, provided that the payment terms. Many companies allow 30-60 days before payment is due. Maybe you should consider reducingpayment terms to 14 days or 21 days.

Modifies the payment terms may mean the ability to receive their money as soon as possible. It may also mean that an account becomes delinquent one month without pay. They have the right to initiate collection activities, including the most precious time has passed.

2. Reminder Written Declaration and follow-up calls

Once an account becomes delinquent, send a reminder to customers to encourageto pay the bill. This should be done with care and attention in his letter, since the laws concerning debt collection techniques, are very specific. Sending written correspondence also means you now have a record of your attempt to collect the debt maturing in the case that the rise of problems in the future.

You should also call the customer and remind them of their delinquent debt, and provide an estimated time frame for payment. Again, be careful in yourcommunications, the choice of text, and the time of your call.

The Fair Debt Collection Practices Act (FDCPA), borrowers are offered some protection. Be sure to follow the laws and guidelines, depending on the contact methods you choose.

3. Third Party Collection Agencies

Sometimes, despite your best efforts, some customers do not pay their debts. Although some of its customersmay be experiencing financial problems, this does not help your business if they have already received the goods or services to you in good faith and are now able to pay the bill.

When you have exhausted all domestic avenues of debt collection options, it's time to call the third party collection agency to pursue past due balance for you.

Collection agencies are professionals in their field of expertise. This means that you are well awarespecific rules and regulations surrounding the field of debt collection. They are able to act on behalf to recover any payment due to criminals and gathering techniques used by debt are specifically designed to provide a flow of cash in business as soon as possible.

Recovery proceedings for recovery of outstanding debts - debt collection techniques based

People are often too scared or intimidated by collection agencies, debt, often because they know the power these companies have. E 'fair to say that some debt collection agencies less scrupulous bring people into believing that they have more power than they really do not help the situation. Collective management societies are organizations that are used by other companies to collect debts paid.Some large companies have their own debt collection departments as part of its activities, but most agricultural work, as collection agencies specialize.

Collector for the use of this type of work is usually done on the basis of a fixed fee or a percentage of the outstanding debt. Some of these collectors specialize in actually buying the outstanding debts completely. This means that if you owe money to a companyand sell their debt to a collection agency, so legally owe the money to the collection agency instead. When companies sell their debts to debt collection agents receive only a small fraction of the amount due. Whatever the body can get over what they pay is your gain, and how they make their money. The company selling these debts then amortize the difference between what was and what they receive from the agency. The fact thatonly source of income for some collection agencies is to collect debts that can lead them to be highly motivated to get that money, which is known to cause some of the unfair practices.

Debt collectors can not enter your home or to carry their belongings. Basically all a debt collector can do is ask for money. The problem is that they can do it again and again and again, and some of the most sinister are known for the soundthreaten or intimidate. A good collector really try to establish a positive relationship with the debtor to start discussing how the debt can be repaid. This agreement may also include part of the debt write off.

collection agencies debt should not contact you at inconvenient times, such as early morning or late at night. You can call your work, but must stop if you tell them youremployer allows you to receive calls at work. No debt collector allowed to threaten violence or harm in any way, or use obscene language. Neither are allowed to make false claims about the amount due, lie about their official or legal rights, and threaten to take your property or have you arrested or garnish your wages (known as income withholding in the United Kingdom).

In the U.S. Fair Debt Collection PracticesAct governs how collection agencies can work. Many states also have their own laws on debt collection, and in general, if state law is considered more stringent than the FDCPA, then state law is what counts. In the UK, collection agencies debt covered by the Office of Fair Trading, which provides guidelines on how it should work, and an illustrative list of unfair practicesas harassment or intends to have more powers and rights.

Collection techniques of debt

Here are some debt collection techniques sound that can be followed by companies to reduce bad debt crisis:

Sending a letter of pre-harvest.

Hiring a collection agency.

Do it yourself.

Sending a letter pre-collection

Most companies do not want to "play cop" with their customers, in order to approach a collection agency, which for a nominal fee to send a default notice askingto pay.

Remember, a notice of a collection agency is much more effective communication of your company. It tells the defaulting customer that they have hired professional help to collect the shares and therefore increases the likelihood that the customer who pays the debt faster. The 'fear factor' of credit rating damage is associated with collection agencies.

Hiring a collection agency

A collection agency at the FairDebt Collection Practices Act is one that recovers debt on behalf of others. Uses several methods to retrieve the errant customer fees:

Collect calls are a necessity in debt recovery. The library call management in a calm and professional can make a difference where the collections are made or lost.

Skip tracing is a detection method adopted to find a debtor who has absconded orintentionally or unintentionally.
Forwarding occurs when a collection agency forwards the debit from one to another collection agency, perhaps because it has no authority to do business, where it is.

Transfer Flow is a new concept in which a collection agency agreement with a business to buy all bad debts regularly.
If you do it yourself

As mentioned earlier, most businesses suffer from baddebts due to the lack of a debt management course. Most organizations minimize their debt management if they had clearly defined credit policies. Moreover, a clear understanding of the law must be considered before a business drags its clients to court. This is a bit boring ", so companies have to be very sure with their preparation.

Some important facts about credit recovery techniques

Many people who are indebted to hate dealing with collection agencies debt because these bodies, how to use tough tactics to chase payments. If you are burdened with debt, here are some facts you should know to protect themselves from unfair treatment.


According to the Fair Debt Collection Practices Act, collection agencies are allowed to contact between 8:00 to 9:00 eachday by telephone
The collectors must stop calling once they receive a written communication indicating that you are willing to settle their debts
You can ignore the collectors if they feel they are going to threaten, harass or abuse you. Any offensive language is actually prohibited by collectors.
The debt collection agents are forbidden to communicate with you in your workplace ifNot accepted or agreed by their employers.
It is illegal, if officials of the collection agency that he or she is a police officer or lawyer. Misrepresent the debt or deception to collect the debt is totally illegal.
The collection of the credit bureaus have no right to publish your name and address in one of the lists of bad loans, as it tarnishes the image.
It s totally illegal ifOfficials threaten and force you to pay the amounts due unjustified. It 's very unfair to you.
The claim may be brought to collection agencies debt if they report false information on your credit report with the intention of ruining your credit rating.

They are also burdened with huge debts is very important that you know your rights when faced with all kinds of irresponsible harvesting techniques.

Credit Repair Techniques - How to validate a debt

From now on one occasion

There is nothing good to receive a letter from the collection. But there is a powerful technique for repairing credit, known as debt validation, which can turn the inconvenience into an opportunity. Like most credit repair techniques debt validation should be done carefully and only in favorable circumstances for success.

Your rights

Debt validation is the right to challenge a debt and receivewritten verification of a debt by a debt collector. This right is granted by the Fair Debt Collection Practices (FDCPA), Section 809. The intent of the law is to prevent errors in the collection of debt, including billing the wrong person, the wrong amount, or debt that has already been paid.

The validation time

It is important to know that you only have 30 days to exercise the right to validate the debt under the FDCPA. In practice, the collectors are sensitive to the period of 30 days and if you ask for validation after the deadline, it is likely that applications will be ignored.

Do action

Before carrying out the validation of the debt that you must investigate the statute of limitations (SOL) of debt and establish the extent of the risk of legal action. The Sun is the length of time a collector can be forced to pay a> Debt through the courts. SOL is useful to understand all the credit repair efforts, and that beyond the Sun, a collector can not sue. Or if they do, they will prevail in court, claiming the SOL defense.

State differences

The requirement varies from state to state and by type of debt, so you have SOL for specific search on the internet. If the debt was incurred in a country other than the current residence, check both the stateSOL standards, as a collector may apply even more favorable to its cause, ie the longest.

Opportunities for settlement

The importance of knowing your Sun is remarkable. Validation of a debt that is beyond the Sun is not able to implement the law of that demand. On the contrary, be aware that some debt collectors treat validation as a trigger for the intensification of efforts in the collection. Validation of debtSOL is still a valuable technique for repairing credit, but you can choose to limit their efforts to debts that are willing to settle.

Preparation of the Charter

Once you have studied the sun and decided to go ahead, it's time to prepare a letter of validation. Keep your letter simple as possible. Like other communications repair credit, there is no profit to share their life story. There is also a value, at least in the initial, to make an aggressive position. Be polite and ask them to validate the debt and provide a bulleted list of specific requirements, including documentation that owns the debt collector and a guide to the amount owed.

The result of validation

For the FDCPA, the collector did not report the debt to credit institutions are not allowed to do so until they provide validation. And they have already been identified and are able to validate the debt that has to stopcollection efforts> and stop reporting.

Over the following

Debt validation is a powerful credit repair, in most cases produces excellent results. But it should also be aware that the legal precedent that defines the obligations of the collector is incompatible. As a result, some collectors only provide minimal documentation and see your work. Furthermore, since there is no time limit for responding to a collector, from time to time you may need to pressthe problem.

Copyright © 2010 James W. Kemish. All contents. All rights reserved.