According to recent statistics, almost half of business owners say that their unpaid invoices had increased in 2023 compared to the previous year. Effective collections strategies are more important than ever, and a New Jersey collections attorney can certainly help you put these strategies into place. That being said, there are plenty of steps you can take on your own to streamline your collections process and enjoy better cash flow this year. Here are a few examples of effective strategies for collections in New Jersey.
Strategies for Collections in New Jersey
Hire Professionals Who Understand Collections
While collecting unpaid invoices is important, most businesses have more important things to deal with on a daily basis. After all, you probably did not start your business with the primary goal of spending all day chasing down debtors. As a result, it might make more sense to hire professionals who understand effective collections strategies.
This might be as easy as hiring a staff member on your team who will devote all their time to chasing down missed invoices. You might also outsource this service to a third party. A debt collection lawyer can also provide assistance. Whatever the case may be, it probably makes more sense to focus on running your business rather than collections.
Use Effective Negotiation Tactics
Debtors may be more willing to negotiate than you realize, and a number of effective negotiation strategies can lead to positive outcomes for everyone involved. One option is to use emotional tactics. Consider making it clear to the debtor that your bottom line is suffering because of the debt, and that you may encounter serious issues as a result. Consider your debtor’s emotional needs and wants. When you approach negotiations with a certain degree of apathy and mutual understanding, it may be more effective than considering only the numbers.
You may also have the opportunity to renegotiate debts. This may involve settling for a lower payment and ensuring that you walk away with at least something. Debtors may be willing to hand over a percentage of their debt so that everyone can simply move on and stop devoting needless hours to resolving the situation.
You can also negotiate effectively by considering a debtor’s pressure points. Determine what kind of leverage you may have over the debtor. While you should never threaten your debtor, you can point out that failure to pay may damage their reputation in the wider business community. You can also incentivize payment by offering better business deals in the future.
Create Agreements Beforehand
Some of the best strategies are proactive rather than “reactive.” In other words, you can set up agreements and policies before the debt is ever accumulated to streamline the collections process. For example, you can incentivize early, prompt payments by laying out penalties. As long as both parties sign an agreement, these penalties can be enforceable.
Accept Numerous Payment Types
Another strategy might be to offer numerous payment types. This especially applies to credit cards, as debtors may be willing to pay off one debt with another form of debt, especially if you can incentivize them to prioritize your payment over others. By offering to accept a wide range of payment types, you increase the chances of having your debt resolved.
Put Everything in Writing
As a general note, it is a good idea to put everything in writing when communicating and interacting with your debtors. Emails may be used as evidence, and snail mail is always a solid option if you are trying to collect and prepare evidence for a potential legal action. Communication is key when it comes to collections, and you can take additional steps to make yourself as clear as possible.
Understand Time Limits
You should build your collections strategies around the various time limits laid out by US and New Jersey law. These involve the statutes of limitations, which may vary depending on your specific situation. In addition, you should be aware of the statistical time limits involved, such as the low likelihood of recovering payments after a 90-day period has passed.
Work With Snellings Law, LLC
If you are ready to take your collections strategies seriously, consider working alongside a qualified collections attorney in NJ. Choose Snellings Law, LLC to immediately get the ball rolling. We have considerable experience in debt collection in New Jersey, and we can help you get started with a collections action plan immediately. The needs and priorities of each business are slightly different, so internet research can only get you so far. Book your consultation today to determine the most appropriate strategies based on your specific situation.