What Options Do You Have When A Debt Becomes Overdue

Posted by Morgancurtis Collects on March 11th, 2021

If an invoice exceeds its credit terms, your chances of collecting the debt begin to decrease. It has always been this way – the more an invoice ages, the more difficult it gets for the business owner to collect payment against it. Things appear much more alarming, especially when you take a look at the statistics. Almost 30% of all business currently classifies more than 10% of their debtor ledger as over 90 days old. Also, around one in ten business companies wrote off more than 5% of their annual turnover back in 2014. You should consider yourself fortunate if you never had to put up with debtors yet. What will you do when you encounter payment defaulters? You will surely run into debtors sooner rather than later. Wouldn’t you look for ways to deal with overdue debts? This topic will introduce you to the best options for debt recovery. Usually, opting for Commercial Debt Collection Services is the most plausible choice, but there are a couple of other options too.

Do it yourself

First of all, if you have a dedicated in-house team charged with credit control, you may find it tempting to chase the customer without external support. It’s beneficial because your team already understands your customer base and will be able to maintain the relationship they managed to build. It even keeps you in control at all times. As a result, you’ll stay abreast of everything that happens and receive updates on cash flow forecasts frequently and accordingly. The only problem with this strategy is that it’s time-consuming. You may end up valuable time and resources. That’s why it’s better to hire one of the best New York Debt Collection Agencies to handle this task.

Outsource it

Once you run out of your in-house efforts, you may consider outsourcing the debt. Debt collection organizations are usually the best at recovering particularly outstanding invoices. They dedicate the time and attention needed to each customer and get your money without damaging the customer-business relationship. According to business researchers, almost 17% of all companies outsource their credit control function these days. The survey began in 2011. Today, after ten years, it’s safe to say that many more business owners are traversing this road.

The last resort

The final option is to seek legal action. While some customers respond to debt recovery procedures and techniques employed by business owners and debt collection agencies, there are a few people who need a much firmer approach. The only way to persuade these folks to clear their debts is to resort to legal proceedings.