3 Warning Signs that an Account is Headed for Collections
…and What you can Do to Protect Yourself
When a customer or client has fallen behind on payments, there are certain behaviors you can expect to see. While every debt collection situation is unique, if you can start to spot signs that an account may be headed to collections, you may be able to take steps to rectify the issue so that you do not have to refer the matter to a collection agency. Here are three signs that an account may be headed to collections.
- Significant Changes in Communication – If you notice that a client has significantly decreased their level of communication, it is a safe bet that they are trying to create some distance in the relationship. Avoiding communication is a common way that debtors keep the issue out of their mind and avoid having to make a payment.
- Strange Excuses – Another sign that an account may be headed for collections is that the client is making a series of excuses that seem unlikely for not having settled their account. Common excuses that clients make include unreliable mail delivery, technical issues with their “system,” misplacing an invoice, or simply thinking that a matter has been settled.
- Making Promises that are Contingent on Certain Events – If your client is telling you that you will get paid once they wrap up a certain project, it probably means that they are having significant financial problems. It also means that they likely owe other parties money as well, increasing the probability that the account will go to collections.
Steps you can take to Avoid Sending an Account to Collections
Sending an account to collections cuts into your bottom line, so you should avoid doing so whenever possible. Here are some of the things you can do when you start to think an account may be headed for collections:
- Make sure that your business contracts are in order. They may contain clauses that allow you to take certain legal action should your client fail to pay within a certain amount of time.
- Consider using pre-collection services. This service involves sending letters from a collection agency before the account is actually placed in collections
- Send a final notice. Keep in mind that the way a final notice is worded can help preserve a business relationship. On the other hand, a poorly-written final notice can just be ignored.
Call CMCS Today for More Information
If you are concerned that you have an account that may be headed for collections or need to send an account into collections, call CMCS at 800-223-6259 today. We are premium recovery service that serves clients nationally, if you have an account that needs to be collected we can help.
