31/03/2014

10 tips for dealing with debt collection

1 - Have an agreed and signed a contract with the inclusion of clear specifications of the provided service, deliverables, deadlines, payment policies and late payment fees before starting to work.

2 - Get a upfront payment as a deposit in advance. Unless you have a long relationship with a client, get some deposit in advance.

3 - Accept several forms of payment and encourage credit card payment. In this way, you are sure to be paid even if the client does not have the funds at the current moment.

4 - Make arrangements for payment before you deliver the final issue. Hold back something. For example, send locked pdfs but never send native files before you are fully paid, so that they will need to pay you before you deliver the finished job.

5 - If you are not paid, follow up every single day until you receive your money. Establish a plan and stick to it.

6 - Before you pick up the phone or send and email or fax, it is vital that you can include all the details of the debt you are talking about. Many debtors know how to use a question you do not know how to answer at that moment or a simple detail that was not included in your communication to gain time. Never ever say "I am afraid..." or "I think...", be 100% sure.

7- Take control, be focused and do not let the debtor manipulate you or hold the conversation. If a debtor starts yelling or using abusive language, always stay calm, professional and confident.

8- Public communication campaign: printing a warning on the bottom of your invoices is fine, but if you fail to follow it up, you will not ever be taken seriously. Indirectly and informally let the environment of the debtor know about the lack of financial credibility of your debtor. Contact credit agencies and report late-payers.

9- Keep copies and records and hire a lawyer. Avoid debt collection agencies: try to negotiate with the original creditor and work out a reasonable payment arrangement but never ever offer a debt discount or an arrangement twice.

10- Litigation is the last resort but be ready to file a lawsuit if the worse comes to the worse. This will boost your credibility, confidence and control of the debt collection process from the very beginning and for all your past, present and potential debtors. At this point, do not talk anymore to your debtor, let your lawyer warn the debtor of your intentions.

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