Credit executives work hard at what they do…extend credit to their “credit worthy” clients. Nevertheless, even with the best credit policy in place, there are always accounts that will eventually need to be turned over to a professional collection agency. As a credit executive you should insist upon quick turnover of delinquent accounts. Just as a well documented credit file assist the credit executive in making informed decisions regarding the extension of credit, the same holds true for the collection professional. And this is where teamwork comes into play!
To avoid time wasting efforts in the collection process, the well documented credit file provides the collection professional with necessary information already at your disposal. It is important that you share this information to assure the collectability of your delinquent accounts.
Providing this invaluable information to your collection professional will allow for better communication and demands for your money if armed with the basics of your credit file.
- Name
- Address
- Telephone numbers
- Email addresses
- Legal entity of the debtor
By supplying this type of proper information when placing your claim allows for effective handling of your claim. What type of information is critical to the collection professional?
- A credit application, providing information such as
- Debtor’s full name and physical address
- Debtor’s legal entity (corporation, partnership, LLC, or proprietorship)
- If there are personal guarantors, their names and addresses
- Debtor’s phone numbers
- Bank information which may become necessary should legal action become necessary through the collection process
- Social Security Numbers, Driver’s License Numbers, Birth dates ( all help to identify the correct debtor)
- Documentation showing the exact amount due, breaking down principal and interest (invoices, statement of account)
- Contracts, Proofs of Delivery, Purchase Orders
- Promissory Notes if one was involved in your prior collection attempts
- Documentation of all prior attempts to collect including date, time, name of individual making the attempts and who they spoke to…this provides valuable insight to the professional collector
- If involved, NSF checks, written promises to pay, and any notices sent in an effort to collect on the NSF check (becomes critical for consumer debts (FDCPA) and to assure compliance with state NSF notice laws
- Current credit reports and other financial documentation supplied
- Notices of bankruptcy, receiverships, etc.
Unless your claim is destined for immediate litigation, only provide copies to your collection professional. The necessity to provide the original documentation only arises should a lawsuit be filed.
Communicate openly and frequently with your professional collector. Not all documentation in your credit file may be necessary. He or she will assist you in explaining what documentation is necessary dependent upon the type of delinquent accounts you are turning over. Not only does open and timely communication allow for effective collection techniques to be employed, that same two-way communication prevents the debtor from claiming “I was told by the creditor…” This teamwork approach is necessary for the professional collector to provide you with effective results!