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What should I know about business to business debt collection?

On Behalf of | Nov 23, 2020 | B2B Commercial Law |

Collecting debts for your business from business customers is a little different than collecting from consumer customers because the laws are different. There are far more rules when it comes to consumer debt collection. 

What this means for you is that it will be easier for you to collect your business customer debts because you will not have as many restrictions. 

Set the stage

Business.com explains that you should prepare well ahead of time for collection activity. There will always be customers who fail to pay. Have a plan in place for how you will handle collections from beginning to end. Put someone in charge, such as a credit manager, who will handle accounts and see they follow the plan. 

Start collections

You want to begin collection activity once a debt is 30 days overdue. Make sure to handle all customers the same unless you have an exception for the customer to make payment arrangements that will stall collection activity. 

You can call the customer or send demand letters. Make sure you clearly identify the debt and the amount due and ask for immediate payment. Give them the chance to clear the debt. 

If your efforts do not work, you can send the account to a collection agency to handle. You may also launch investigations into the company to get information that can help you collect the debt. 

Your last option is to file a lawsuit to collect the debt. You should be able to prove your case with the documentation you have on file from the initial purchase through the collection stage.