Things to Avoid While Drafting a Debt Collection Letter

Debt collection letters are different from ordinary letters. Be extremely careful about the language used in such letters. Make sure that you are extremely professional in your approach. Do not make use of words that can ruin relationships with your customer.
If you fail to behave professionally in this letter, it may result to heavy charges and penalties. In the worst situation, your debt may get cancelled as well. Therefore, it is necessary that the content of such letters reflect absolute professionalism as stipulated by law.

The following elements should be avoided while drafting a debt collection letter:

Threats to Debtors

Language That Disrespects the Debtor

A wise creditor will always pretend to be in good terms with his debtor, irrespective of bad past experiences. Ultimately, that debtor is your customer. He will bring business to your organization. Thus, it is necessary to maintain healthy relations with him. While drafting your debt collection letter, you will benefit more by keeping this fact in mind rather than focusing on releasing your anger or frustration. After all, your main target is recovery of your debt and not revenge. For further assistance, visit http://www.doubleaceassociates.com/.

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Strategizing Your Debt Collection System

Debt collection can be a daunting task. There are several ways of communicating with your debtor. Out of these, you will have to select the one that is most effective. However, once you choose a suitable mode of communication, you will have to think about the cost involved in employing that method. Then, there will be some exceptional debtors for whom your chosen method might not work. You will have to find some other mode of communication to satisfy them. This gives rise to a lot of mind-boggling permutations and combinations.
In order to make your life a little simpler, here’s a guide that will help you strategizing the best debt collection system for your business.
1.Study Your Clients Carefully
Study your clients carefully and analyse which mode of communication will suit them best. Clients have different characters and one must know each one better so as to employ the right way of approaching them. Some clients have a class of their own. In such cases, you cannot question their way of living. Instead, you will have to adapt and adjust as per their lifestyle. You may have to specially choose a separate debt recovery strategy for such clients.
2.Take Help of Authorities
Having full knowledge of how your client’s behaviour guarantees smooth functioning of your debt collection process. However, some clients may still default, no matter how professionally you treat them. In such cases, involvement of the necessary authorities is quite important to ease the situation. Although, such cases are rare, the fact is that they do occur and one must not lean back and watch, but rather seek for assistance in accordance to the law.
3.Regularly Reach Your Clients
Regularly update your clients about their debts. This way, your […]

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Strategizing an Economical Debt Collection Process

The debt collection process should not cost you a fortune. The returns expected from the debt collection processes should be higher than the expenses incurred for it. If you fail to do so, you will have to face business losses and failures. This is because nothing will be retrieved as profits. Hence, to avoid this, it is advisable to resort to a cheaper method of debt collection.
However, opting for a cheaper method can be a challenging task, especially when you are dealing with a large number of debtors. In such situations, a debt collection agency can be really helpful. They will professionally take care of client-relationships and debt retrieval for a nominal fee. However, before hiring them, just make sure that they abide by law and are competent enough to represent your business.
A competent debt collection agency should –
1.Provide Standard Debt Collection Services
While selecting a debt collection agency, have a look at their laid down procedure of debt collection. See to it that each and every item included in their service is of a reasonable standard (as prescribed by law or as per your business’s requirements). If it is not, it can be risky for your business’s reputation as they are ultimately going to represent you.
Thus, while hiring a debt collection agency, make sure that you hire an agency that provides quality service. Stay away from those who are solely interested in minting money rather than providing quality services.
2.Have Fair Terms of Service Delivery
A suitable debt collection agency should charge nominal fess so that the creditors find it economical. High charges are likely to scare them away.
Nevertheless, one should be extremely careful while choosing a debt collection agency. An agency providing an attractive cost […]

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When Is the Right Time to have More Debtors?

Debtors are the assets of a business. They represent the cash-generating capacity of an organization. Thus, a high volume of debtors define your business’s prosperity. However, such prosperity comes with a risk of non-payment, bad-debts and losses. Hence, you will always find financial advisers suggesting you to keep your credit period least in order to minimize risks of bad debts. This might be a safe option; however, it might not be instrumental in your business’s growth as a longer credit period definitely attracts more customers. So, how do you balance between the risk and benefits of long credit periods?
The answer is simple – You strategize your credit policy as per your business’s environment. If an opportunity or need for longer credit period arises, you should employ it immediately.
Following are the situations where a longer credit period will benefit your business:
1.New Business Targets
If your business has planned on achieving a new business target this financial year, a need to attract new customers will definitely arise.In such situations, offering a higher credit period as per market conditions will constitute a good strategy.
However, one must not issue credit carelessly to everyone. Certain boundaries need to be kept in mind in order to avoid risks of bad debts. Certain terms must be laid to ensure prompt payment on time.
2.To Get Rid of Your Slow-moving Stock
Certain stock might be staying on your shelves for a long time. Such goods are at a great risk of getting damaged or becoming useless. In such cases, offering a credit period for slow-moving goods will help you attract more customers. This is a far better option than bearing losses of unsold stock. This will also help you in creating more space for new […]

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