Strategies for small businesses and commercial debt collection

Strategies for small businesses and commercial debt collection

| Jun 1, 2020 | Firm News

Californians running small businesses face a unique set of challenges. One of the most common concerns is collecting debt. In some cases, a person or entity who owns a small business might not pay what is owed on time, in part or in full. Commercial debt collection can be complex, and there are key points for small businesses to remember.

Adhering to certain steps can smooth the process of collecting outstanding debt. It might be tempting to become angry and aggressive, but that can make the situation worse with a similar response from the debtor. Being professional and reasonable is a better strategy. Small business owners should understand their legal rights and options when collecting outstanding debts.

What to do and what to avoid

Maintaining sufficient documentation is vital. You can remain organized and prepared for a court case by retaining notes about invoice records, how much was paid, how much is owed and more. While contacting people about their debt is perfectly legal, continuously contacting them on consecutive days and doing so at all hours might be viewed as a form of harassment. Settling the debt for less than what is owed is sometimes necessary, although never preferred. This is a difficult concession, but it can help the business and debtor move on. Finally, a collections law firm can take the place of the business owner in pursuing payment.

When trying to collect the debt, it is imperative to adhere to the law while ensuring that the debtor understands that the bill must be paid. For a variety of reasons, some customers will do whatever they can to avoid paying. Regardless of the situation, having legal advice with business debt collection may prevent common mistakes and help address the issues to achieve a successful outcome.