According to the Small Business Association, as many as 82% of small businesses in the United States fail because of cash flow problems. Many of those cash flow problems come from customers not paying their bills. When payments become overdue, it is important to know how to collect the money owed without crossing into harassment territory. The State of California has regulations that protect consumers from harassment, and respecting these laws is paramount in your debt collection process.
While it can be frustrating when customers do not meet their payment obligations, it is important to approach the situation with professionalism and tact.
Maintain professional communication
It is important to keep all your communication professional and respectful. You should clearly express the issue, provide all necessary payment details and offer to resolve the problem. Avoid using threatening or abusive language, and never make false statements about what might happen if they do not pay.
Adhere to contact restrictions
California law has restrictions, in many cases, on when and how often you can contact a debtor. You should only contact them at reasonable hours, usually between 8 a.m. and 9 p.m., and avoid excessive contact that they could see as harassment.
Respect privacy
It is vital that you respect the privacy of the debtor. This means you should not share their debt information with others or contact them at their workplace if they have asked you not to do so.
Provide clear information
When you contact the debtor, make sure to provide clear and accurate information about the debt. Include the amount owed, the services or goods the debt is for and the payment deadline.
By maintaining professional communication, you can effectively collect debts without crossing over into harassment. This will not only help you recover the money owed but also maintain your business’s reputation for fairness and professionalism.
If your good faith efforts to resolve the issue are not successful, then referring the matter to an experienced collections attorney is the logical next step in most cases.