Tips for Avoiding Bad Business-to-Business B2B Debts


A fair number of the judgments entered in county courts around the country relate to unpaid business-to-business (B2B) debts. A vendor takes a client to court over unpaid invoices, expecting that a judgment will fix everything. Sometimes seeking a judgment is the only way to go. But if going to court can be avoided, giving it a shot is worthwhile.

If you have outstanding judgments born out of bad B2B debts, we can help you with collection efforts. Judgment Collectors is a knowledgeable and experienced debt collection firm that specializes in judgments in Utah, Arizona, California, and eight other states. We would be happy to review your case to see if we can help.

In the meantime, we have put together a list of tips for avoiding bad B2B debt. If you can employ a few strategies that encourage your customers to pay on time, having to seek judgments might never be an issue.

1. Establish Reasonable Terms

Extending credit to customers is a common practice in the B2B world. Business owners understand that there is a bit of lag between purchasing equipment and supplies and generating sales from the products and services offered. So they tend to give one another time to pay. However, things should never be left open ended.

Establish reasonable terms and stick to them. A lot of companies set terms of 30 days from the date products or services are rendered. You could also go 45 or 60 days as well. Just bear in mind that longer terms can lead to more difficult collection.

2. Send Out Regular Reminders

Regardless of the terms you set, make a practice of sending out regular reminders. On a 30-day payment schedule, you could send out two reminders: one on day 7 and the other on day 21. Regular reminders act as a gentle way to let your customers know that you expect to be paid on time.

3. Follow-Up After Due Dates

One of the more common precursors to ending up in court is not following up with customers after due dates come and go. If an invoice is due in 30 days and payment isn’t made, a follow-up reminder should go out on day 31. Do not wait a week or two before following up.

Follow-up reminders don’t have to be rude or abrasive. They probably should not be. But they should be firm about your company’s expectation of being paid as quickly as possible.

4. Reconsider Future Transactions

If an invoice goes unpaid even after follow-up reminders, it is time to reconsider future transactions with that customer. It makes no sense to keep piling new debt on top of old. A constantly growing debt load only discourages the customer from trying to make good.

Cutting off future business may seem like a drastic step. Unfortunately, it is sometimes necessary. There are times when customers need to be made aware of the fact that you are serious about getting paid.

5. Try to Work Out a Payment Plan

In the event that you do have to cut off future business, you still don’t necessarily have to seek a judgment. Try contacting the customer with the intent of setting up some sort of payment plan. A willingness to cut the customer a little more slack could work in your favor to avoid going to court.

Even after attempting all these things, you still might find yourself seeking a judgment. We get it. If you win, do not try to collect your b2b debts on your own. Let Judgment Collectors handle the case for you. You need to get back to your business.