One of the most frustrating things about running a large company is that many customers won’t pay their bills promptly. While you’ll have an occasional dispute about payment, some customers receive products or services they didn’t want, and there are always defective items or those lost in transit. Sadly, in many instances, companies are just slow to pay due to cash flow issues or poor management. Take comfort in knowing that you’re not the only business that experiences this problem, as it’s prevalent. Your first thought is to fire them as a customer, as you want to do transactions with companies with impeccable payment histories. However, even the best business can fall into hard times, and this can cause past-due invoices to accumulate.

The Importance of Documentation

To protect your business, you must use written contracts and invoices. When conducting a significant transaction, never let anything go out the door until you have a percentage of the money upfront. While a downpayment doesn’t eliminate all risks, it shows good faith that they will pay. Another thing that you can do is give a copy of the invoice both in person and through the mail. Most companies have a separate department that handles all the accounting functions, and you want to ensure the bills get into the hands of the right person. Statements of accounts are also vital to ensure the company knows how much they owe and how much is past due.

Should a bill be lost or didn’t get entered into the accounting program, a statement helps them to align their AP with your AR. Even with all these efforts, some folks still won’t pay their bills, and it’s nothing personal. Times are undoubtedly tough, but you do have options. Some businesses are just slow to pay, but they will settle up eventually. Just know that you will likely always find duplicate accounts in the 30-60-90 past due category. Other debts become uncollectible due to bankruptcy or lack of resources.

Bad debts can be written off on your taxes at the end of the year. Ironically, there’s a wide gap between past due invoices and the writing of accounts deemed uncollectible, and in the middle is the perfect spot to have a Massachusetts law firm handle your accounts receivable.

Debt Collection Laws for Large Companies

The laws are strict regarding consumer recovery efforts, and as a large company, you become a debt collector when you have many accounts you’re pursuing. You must follow the guidelines under the Fair Debt Collection Practices Act to protect your company. While these laws are written to protect third-party collectors, it still has good practices that should be observed. Knowing the state and federal laws is imperative, as you can get into serious trouble if you don’t understand and follow these requirements.

The 30-60-90 Timeline

Once you have accounts that hit the 30-day past-due mark, your company should have procedures to start the recovery process. First, you need a copy of the invoice, any contract that you might have, and a statement of the account that shows it is past due. Next, you want to send a letter that lets the accounting department know the bill is now delinquent. It’s not uncommon for accounts to go into the 30-day mark, so you don’t want to be too forceful at this level. However, when the bill goes into the 60-day category, you want to enhance recovery activities. Though there are no exact regulations, it’s a good time to send a certified letter when the account is over two months past due.

A certified letter will be beneficial should you take them to court. Include with this letter any emails or text messages between the companies that show communication. You want to try everything possible to resolve this matter before heading to court, as it costs more to file a suit. Remember that many companies send a certified and regular letter as the insured often gets tossed. It’s also common that it becomes buried on the desk of the owner/manager, and others need the authority to open it.

Once you hit the 90-day past-due mark, you want to use more force in the recovery activities. Your demands for payment must be straightforward and lay out a plan of what will happen if they continue to neglect these debts. Only use declarative statements now, as there’s no need to rehash and send invoices when you get to this level. Let them know your intentions to turn it over to a law firm for a suit. Large companies often have many accounts that need to be collected, so they offer a discount to settle the bill. However, from now on, these accounts will require full payment upfront to prevent these issues from happening again.

Allowing a Law Firm to Handle Your Recovery Processes

Many laws and regulations govern the recovery process. When you have many accounts from your B2B transactions, it’s important to have a professional handle it. The required paperwork, as well as keeping track of the timeline for efficient filing of lawsuits, demands someone who dedicates their time and energy to nothing but recovery efforts.

If you’re tired of seeing the numbers on your AR report increasing, then it’s time to call in professional assistance; Massachusetts Debt Collection Attorneys can help you collect these debts. When the debtor isn’t responding to the demands, we can file a lawsuit on your behalf. Contact us today to turn these past-due accounts over to professional collectors. Though debt recovery is a process and doesn’t happen overnight, we can get your money AR numbers back to an acceptable range.