Tracking down debtors in commercial collections and getting them to pay what they owe is not always easy. Here at Smiley Law Group, we want you to equip you with the best tips from our years of experience handling commercial collections. We’ve compiled this from our years of helping Louisiana businesses manage their debtors.
Be Proactive, Not Reactive
Many businesses allow debt to accumulate for too long. Allowing an insolvent debtor to owe you $50,000 or more already puts you behind the ball. Effective collections begin prior to any debt accumulating at all with a solid contract and hands-on project management to catch uncollected sums before they reach critical levels. Remember that an ounce of prevention is worth a pound of cure, therefore your intake is nearly as critical as collections.
Be on Guard, Spotting Bad Debt Early
Collection problems are often recognizable before they even happen. For example, a supplier extends credit to a construction company that just pours materials into an unpaid construction job. This should be a red flag: promises to pay because “cash flow is tight” should be rejected. In this instance, think joint-check agreement or or direct payment from the higher tier contractor.
Have Safeguards for Non-Paying Customers
Unpaid accounts that sit for six months or more are likely to be the hardest to collect. In many instances these are never collected at all. Do not delay in starting the collections process. If you have automatic triggers for when that happens built into your contracts and operations then you will not be caught by surprise.
Get Organized: Detailed Debt Records
Administrative efficiency often means the difference between recovering debts and default. You must be able to prove that you are owed money, because as soon as an account hits collections there will be a dispute. Having detailed paper and electronic records of the amounts owed and paid will make all the difference. As a debt collection attorney, all we have to rely on are the documents evidencing the debt. Accurate records are paramount to any successful collection.
Smiley Law Group assists business clients in Louisiana with all stages of commercial collections from contract drafting to security devices, demand letters and litigation.
We have extensive experience in commercial litigation, navigating the courts throughout South Louisiana. Once the case is filed, Smiley Law will fight until you obtain a final judgment in your favor, or reach an agreeable settlement with the debtor. We can even help you collect on the judgment.
Our firm accepts collections cases on both hourly fee and contingency fee agreements, depending which arrangement is right for your needs. Call us today for a free consultation to determine the best way to handle your Louisiana commercial collections case.