The Do’s & Don’ts of Collecting Debt That’s Owed to Your Company

One of the most frustrating parts of running a business is the instability that comes with those who don’t pay on time. Collecting debt that is owed is a balancing act of business and customer service. 

Most cringe at the thought of calling up a customer and asking them to pay for services rendered, but without debt collections, funds could dry up, and production can be forced to halt. 

Thankfully, there is a process that businesses can use that help ease the customer into timely payment. 


When approaching a customer about money, the goal is to get the money and keep the client. People get busy with their lives, and things fall through the cracks so sending a friendly reminder about an upcoming or past due bill is usually appreciated. 

Steer away from confrontation and approach the subject matter by giving customers the benefit of the doubt. 

Collecting Debt in Stages

Never go straight to collections with an “iron fist.”  There should be a gradual process in place that starts with a gentle reminder. Persistence is key when it comes to debt collections and being polite will produce a more favorable outcome. 

If that goes unanswered, then escalate the touch point to direct contact via phone while keeping the tone professional and helpful rather than confrontational. If your client is still not answering, the final step would be to submit your case to a third party collection agency. 

Always Abide by the FDCPA

The Fair Debt Collections & Practices Act protects consumers from unscrupulous methods sometimes practiced by collection agencies. Here are some actions that every company must avoid. 

  • Calling at unreasonable hours
  • Adding fees that were not part of the original contract 
  • Pretending to be a lawyer to intimidate a client
  • Lying about credit reporting practices
  • Pretending to represent the government
  • Making false threats to the client such as having them arrested or sending them to prison for uncollected debts
  • Threatening to confiscate property that is out of legal bounds also 

Having a legal firm that specializes in business law, such as Manfred Sternberg & Associates, can help companies avoid any violation of clients rights.

Should Businesses Settle

One thing to keep in mind when dealing with overdue accounts is not all of them are intentionally avoiding payment. Some clients don’t have the money right now but know that they will in a few weeks so a payment option may be the best choice.  

That is why businesses should always offer some choices when it comes to repayment. This way the customer stays in good standing and companies can collect on services due. 

The Bottom Line in Debt Collection 

Most customers want to pay their bills, very few intentionally purchase with no intention of paying. Give clients the benefit of the doubt but have a plan in place for collecting debt. 

Keep track of every interaction with debtors and know that from time to time companies have to write off bad debt but more often than not consumers want to pay what’s owed. So give them a chance, and if your company has any questions, never hesitate to give us a call

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