Collecting Debts in Tough Times
The economic downturn has affected many businesses, and this article in the Wall Street Journal states that many large businesses are taking a longer time to pay their bills. So how do you make someone pay? Here are a few tips that may help:
Be careful with credit in general. It’s a good idea for your company to extend some credit, but be sure your credit practices are fair to your customers and comply with federal and state credit laws, and that your policies are strict enough to ensure that your business will be paid.
Be consistent. Create a protocol for employees to follow if customers don’t pay in a timely manner (overdue notices, demand and collection notices, etc.). Treat every customer with outstanding invoices in the same manner every time, and make sure you’re giving the person or business an appropriate amount of time to pay up.
Don’t be afraid to report bad debt to credit bureaus. When someone refuses to pay, go through the process of reporting them to the major credit bureaus. While it may seem extreme to affect someone’s credit score, but they’ll have to settle the debt if they don’t want it to affect their credit score
If all else fails, deduct the bad debt on your taxes. You can find the qualifications for doing so on the IRS website.
11 months ago • 1 note
