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| Stubborn as a Mule! |
What can be more frustrating than dealing with a company
that just refuses to pay? Well, let us begin by asking a few questions.
1
Does the company have the ability to pay? If it
doesn’t…well you’re just wasting your time. Threaten to withhold shipments,
proceeding with litigation, reporting them to the credit bureaus…will not
result in recovery of your funds.
2
Let’s assume now that the company does have the
ability to pay…now what?
It’s important for a client to decide what the true costs are to be spent
in the collection effort. It makes no sense to spend $300 to collect a $500
claim. In addition, time is money…so how much time would you as a creditor wish
to spend pulling together the necessary documentation necessary to recover your
$200 dollars?
3
If you decide it is worthwhile to pursue taking
into account the cost and time involved, are there any potential negative
aspects to the pursuit? Will you potentially lose a valued client? Is there a
potential counter claim that the debtor could file against you should you
proceed with legal action?
4
Let’s now assume that you have decided it’s
worthwhile pursuing and have placed calls and written letters to no avail. What
techniques are available to finally get some of your hard earned dollars in the
door?
There are several techniques one may use. Let us explore a
few of them.
1
You can settle – this is many times the wisest
approach. Something is better than nothing. In addition, there may be reasons a
valued client isn’t paying… real or perceived. Or you may value your long term
relationship with that client as important enough to take less during their
“financial difficulties.”
2
You can always proceed in small claims court –
as long as the amount falls within the jurisdictional limits and you have
decided that you no longer wish to maintain any form of business relationship
with your client. There are real risk involved also with this form of
action…you can lose!
3
You can use a collection attorney – and in many
cases, it is wise to do so. However, know that you will be paying up front
court costs and suit fees along with usually higher percentages than using
other alternatives. There is definitely the necessity for using creditor’s
rights attorneys…after the proper review and investigation to deem it of
potential value to you at the end of the day.
4
Mediation and arbitration – this is only a good
choice when both parties desire to continuing doing business aside from this
particularly disputed transaction. This unfortunately is not the case many
times.
5
Write it off – Many times after doing the costs
analysis, this makes the most logical business sense. Even is some limited
instances, if there were real issues with the product or service, many times
this act can save good will and help retain a valuable customer.
6
COLLECTION AGENCY – In the past, turning over a
claim to a collection agency always resulted in the end of the business
relationship with that client/customer. Also many agencies may charge flat
intake fees, percentages on the amount collected, so on and so forth. On the
other hand, you wouldn’t consider turning your claim over to an agency if the
collection process was easy and cost effective to do so on your own.
This is where Collectivity can assist you. Visit us at www.collectivityllc.com to discover
how we can help you recover your money while maintaining a positive business
relationship for you with your customer.
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