There are several actions you can take to reduce the amount owed to you before resorting to debt collection agencies.Be careful when offering credit. Carefully check credit references of each new account and don't extend more credit than the firm can handle. Explain transaction terms thoroughly. When extending credit, make sure that accounts know when you expect payment, and clearly detail any credits or penalties for early or late payment. Try to follow the following points:-
- Do not expect customers to police themselves; instead, make sure to promptly send statements and reminders of payment due dates.
- Institute a series of overdue notices
You should schedule regular written and oral reminders before even considering a collection agency. This will not only help save money, but will also avoid the ill will that can be generated when using a third party to collect the funds. - Set an absolute due date and stick to it. As a final step, set an absolute due date before the account is turned over to a collection agency. Do not extend this date, but do give the debtor warning of this final payment date.
