Before any debt collection procedure can begin, a critical question must be answered: is your underlying contract or agreement legally sound and clearly documented? At CCLS, we often find that the strength of a debt claim is determined long before the first payment is missed—it’s forged in the initial client agreement.
A common challenge businesses face is relying on vague verbal agreements or incomplete documentation. When it comes time to collect, a debtor can easily dispute the terms, delaying payment or complicating litigation. For effective debt recovery, your contracts must be meticulous, detailed, and signed.
Key elements that make a debt highly collectible include:
- Clear Payment Terms: Explicit due dates, late fees, and accepted payment methods.
- Detailed Scope of Work: Unambiguous description of services or goods provided.
- Identifying Information: Full, correct legal names and addresses for both parties.
- Signatures: Properly executed by authorized individuals.
Our 37+ years of experience has taught us how to quickly assess the collectibility of a debt based on its documentation. We can help you review your current client agreement templates to identify and remedy potential weak spots, minimizing future credit risk. A strong contract is your first, best line of defense. By ensuring your paperwork is airtight, you empower us to pursue collection swiftly and successfully, safeguarding your business’s financial health.
Would you like us to review the key points you should include in your client contracts to minimize future debt collection issues? Call us today to learn more.