Can I Eliminate Bad Debt?

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Aug20

Can I Eliminate Bad Debt?

August 20, 2006

Know More: Creating a Credit Policy, FAQs, I have past due customers, what do I do?, MIlitary Collections, Rent Collections, Using Collection Agenices, What makes a Good Collector?

I would say it is very hard to eliminate bad debt completely, but you can take steps to reduce the bad debt you have.

You should have a standard in-house written policy on handling all of your accounts. This policy should include when to call new customers, when to call established customers, and when to send letters.

Most businesses have regular billing, and you will find that most debtors will pay as agreed. A certain number will pay after a friendly reminder letter and some will encounter changes in their economic situations that make it difficult for them to pay, such as illness, or loss of a job, divorce or another unfortunate circumstance.

If you follow up regularly with these customers, they will usually give you insight to their financial situation, their reasons for not paying , and you can get a payment promise or set up a payment plan.

This can only be done if you give each of your accounts proper and constant attention. You need to keep on top of your accounts, even those that are just a little bit past due in order to avoid problems.

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