Billing Practices That Could Help Avoid Future Judgments

Billing Practices That Could Help Avoid Future Judgments

We are all about seeking judgments against debtors who avoid paying what they owe. Sometimes obtaining a judgment is the best course of action. But what if companies could avoid future judgments just by making changes to their billing practices? A few adjustments here and there may not prevent all bad debts from going to court, but they can cut down on the judgments.

Note that what you are about to read pertains to judgments involving debt collection. These are cases in which a creditor takes a debtor to court for not paying a bill. A judgment is entered in favor of the creditor and against the debtor. Now the creditor has access to certain legal tools for collection purposes.

Imagine how different things would be if a creditor were able to avoid court altogether. Never going to court means never having to deal with judgment collection. Sometimes, avoiding court is a matter of adjusting billing practices so things never get that far.

1. Be Firm About Payment Terms

One of the first things we might suggest is to be firm on payment terms. If your company’s normal terms are 30 days, do not let non-paying customers go for another 10-15 days beyond that. Be firm about your terms. If payment does not arrive on time, begin attempting to contact the debtor on the very first day following the deadline.

Companies that do not hold tightly to their payment terms give customers every reason to delay payment. Let it go once and it’s no big deal. But making it a normal practice creates bigger problems.

2. Adjust Terms if Necessary

We have worked with clients whose terms were longer than 30 days. Sometimes this works, but other times it does not. It is often better to make terms shorter. That way, customers know they don’t have a lot of time to settle up. Some of them will be more circumspect in their ordering and purchase practices when they know they only have so much time to pay.

3. Maintain Regular Communication

If there is one thing that we have learned about successful judgment collections, it is the importance of regular communication. The most successful companies send out payment reminders a few days before bills are due. They also schedule automatic reminders to go out when deadlines are reached and bills remain unpaid.

Sometimes it only takes a reminder to prompt a debtor to pay. Reminders help those debtors who simply forget. They act as a warning to those who haven’t forgotten that creditors haven’t forgotten either.

4. Work with Debtors When Necessary

This final tip has more to do with actual collection than billing. Here it is – be willing to work with delinquent debtors when necessary. The fact is that delinquency happens. Both companies and individuals run into circumstances that, despite their best intentions, prevent them from making good on their debts. They are not purposely trying to skip out. There is just some extenuating circumstance making it difficult for them to pay.

In many cases, something as simple as setting up a payment plan can avoid civil court and a judgment. Truth be told, judgment collection agencies like ours often rely on the payment plan as a way to get a debt settled. Sure, payment plans aren’t ideal. You would rather have full payment up front. But a payment plan does have its advantages over going to court.

Civil court and judgments are sometimes a necessity. And when they are, Judgment Collectors is here to work on your behalf. If you can avoid court with minor billing changes, isn’t trying worth a shot?