Commercial collections are much different than consumer collections, so it’s critical for any company that needs to handle this type of matter to understand how to handle this sensitive matter. These situations often require more than just showing that money is owed.
In many cases, commercial collections depend on being able to prove what was ordered, delivered and billed. From there, showing what’s still owed is crucial. Clear records can help to identify each step of the transaction.
What records should be maintained?
Invoices are central to these claims, but there are often other documents that are useful. Contracts, purchase orders, account statements, credit applications, delivery confirmations, payment histories, email correspondence and detailed collection notes may all be helpful. These show the basis of the debt and the history of payment and collection efforts.
Every aspect of the agreement matters. Having a written agreement that can identify payment terms, interest, late fees and guarantees is often beneficial. In the absence of a formal written agreement, other options may be useful. For example, if the business made partial payments or had repeated orders, that may show that the company understood the situation.
It’s also useful to have delivery and performance records, both of which can refute claims that products or services weren’t received. Ideally, delivery documents should be signed or verified in other manners if the payment due is for goods. Customer approvals, work orders, and project notes can be useful if the money owed is for a service.
Dealing with collections from other businesses isn’t an easy task, so it’s often beneficial to work with someone familiar with these matters. They can assist with explaining the options and determining the best path to move forward.
