When your business provides goods or services for an individual customer or another company, you expect timely payment for what you provided to your customer or client. After all, you incurred costs associated with the delivery of the goods or services, and your company has bills to pay, just like customers or clients do.

Unfortunately, some people will do just about anything to avoid paying an outstanding invoice, whether you’ve provided consulting services or medical care. Securing payment may require the use of many different tools, from collection efforts to lawsuits against the non-paying party.

There are many ways in which you can collect on outstanding debts, many of which require a substantial investment of time and effort. Instead of hiring collection professionals to work for your company and trying to call or email non-paying individuals in order to coerce them into filling their obligations, making one or two attempts at contact and then following up with a timely lawsuit may be the best option available.

Some people just don’t care about collection accounts or their credit score

If you hire in-house collection specialists, you can keep the debts you have yet to get paid for in-house, although you will also have to worry about the costs of those additional salaries and benefits packages. For that reason, among others, it is a much more common practice for companies to sell their outstanding debt to a collection company for a fraction of the total value of the debt.

The collection company will then make aggressive efforts to collect on the full amount of the debt in order to turn a profit. Not only does your company lose out on the full value of the goods or services you provided, but you also have to worry about the impact on your reputation if you partner with the collection company that engages in illegal behavior.

For some people, a collection notice will incite them to pay, while for others, the threat of a collection account on their credit score may not be enough to motivate them to repay what they owe.

Lawsuits can lead to liens or garnishments

When you take direct action by filing a civil lawsuit regarding an unpaid debt, you drastically increase your likelihood of successfully collecting on that debt. The courts can either record a lien against real property or a vehicle that you provided service for, or they can order a garnishment of someone’s wages.

In other words, filing a civil lawsuit is a more straightforward way to ensure that an individual pays you the full amount owed, all without the stressors that come with organizing in-house collection efforts or the losses that come from selling the debt to an outside company.