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How can a small business collect a debt?

| Nov 8, 2017 | Business Formation & Planning |

As a small business owner, you have a lot on your plate. With this in mind, the last thing you need is a client that doesn’t want to pay. Unfortunately, this is all part of doing business.

If you find yourself in this position, there are many steps you can take in an attempt to collect the money that is owed to you:

  • Remain calm. As angry as you may be, there is no point in getting upset. This is only going to make things worse on you.
  • Know your legal rights. There are things you can and can’t do in regards to debt collection, so you need to know your rights and how to remain within the legal limits of the law.
  • Document everything. This is extremely important, as it will work in your favor if you end up taking the other party to court.
  • Don’t harass the other party. There is nothing wrong with attempting to collect what is due to you, but it’s important that you stop short of harassment.
  • Hire a collection agency. It may not be something you want to do, but there could come a point when you have no choice but to pass this off to a professional.

There is no surefire way for a small business to collect a debt, but there are steps you can take to improve the likelihood of success. If you find yourself in this position, you must remain persistent, all the while knowing your legal rights. This will hopefully lead you to receive payment in full in the future.

Source: Small Business Trends, “6 Steps to Successfully Collect on a Small Business Debt,” accessed Nov. 08, 2017

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