People use fancy terms like accounts receivable or past due accounts to refer to debt, but Florida business owners cannot ignore a basic fact: Someone owes you money. Your company is carrying a financial loss, while another party is enjoying free use of the goods or services you provided on credit. However, even when motivated to pursue debt, you may not know exactly how to proceed. The Florida Consumer Collection Practices Act (FCCPA) contains numerous prohibitions that apply to original creditors. Violations could give your customer a private right of action to seek monetary damages, legal costs, and attorneys’ fees.
Therefore, while it is critical to be proactive about debt collection, business owners must also avoid tactics that expose them to litigation. A Clearwater business litigation lawyer can consult with you on establishing efficient, effective practices for A/R, and legal help is essential when pursuing lawsuits against debtors. Plus, some tips on debt collection may also be useful.
Avoid assumptions about the debt. Before jumping to conclusions about why the amount is past due, assume the positive. Perhaps your customer simply forgot, lost the invoice, or was away from the office for an extended period. Your attitude with initial communications about the debt sets the stage for the conversation, and negativity could put the other party on the defensive.
Move gradually in communicating with your customer. Think of the discussion about the past due account as a series of stages, each with increasing levels of assertiveness.
- The debtor gets the benefit of the doubt. Extend your appreciation if the payment crossed in the mail and offer to help with getting the matter resolved.
- Your customer has clearly ignored initial correspondence, so be firm in your desire to get the debt off your books.
- You will need to be direct and insistent while avoiding any language that is offensive, threatening, or unprofessional. Make sure the debtor knows that you want to avoid legal action but that you must protect your business.
Assign accounts receivable to a single employee or team. Asking employees, especially sales staff, to handle their own accounts can be disruptive. Delegate debt collection to one person, and larger organizations may even consider a team for managing A/R. Keep in mind that, at some point, it is smart to turn things over to a Clearwater business litigation attorney to handle.
Implement multiple channels for collection efforts. Whatever route you usually use for communication, gradually add one or more. Send an email or text, and then follow up with a fax or phone call. Employ these channels regularly, but never so frequently as to constitute harassment.
A Pinellas County Business Litigation Attorney Can Assist with Debt Collection
These are helpful guidelines for accounts receivable, but you will need skilled representation to pursue a debt collection lawsuit. To learn how we assist with these cases, please call Clearwater Business Law at (727) 785-5100 to set up a consultation. Our Florida business lawyers can meet with you at our Clearwater, FL offices to discuss details.