Overdue debt, what it is and how to recover it

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When we have a portfolio of accounts receivable, we can sometimes find ourselves with overdue debts . An overdue debt is a debt whose payment date has expired. In this sense, the client has fallen into default and has started to be charged interest and penalties.

The causes of an overdue debt can come from the client or from a poor buy uk mailing list process. It is important to identify the source of the problem to know what strategy to execute to address it. To know where this failure comes from, implementing collection software is a strategic decision, as it allows you to keep a detailed record of accounts receivable and communications with customers.

What will you find in this text?

Internal causes of overdue debts

Strategies to collect overdue debts, caused by debtors

Sending payment reminders

Go to collection agencies or companies

Go to the legal route

Integrate a debt collection management software

Internal causes of overdue debts
Among the internal causes, one can find a poor management of the collection process. For example, delays in sending the invoice or the omission of such sending, in which case, the client has not been informed of the payment date of the invoice. This collection error , which has caused the overdue debt , could be solved in the future by adopting modern collection methods , such as the automation of collection by implementing accounts receivable software . With this technology, sending payment reminders on time would be solved.

Strategies to collect overdue debts , caused by debtors
On the other hand, when we are faced with overdue debts due to the debtor's problems, there are other strategies that we should consider to obtain payment. Here are some of them.

4-Automate your collections management

Sending payment reminders
Even when a debt has expired, payment reminders are still part of an effective collection strategy. This may be because many times, despite good collection management, customers may not have checked the collection message that was sent (unless it was a call). In this scenario, the way of communicating with customers will vary depending on the time that has passed since the invoice was due.

For example, in the first seven days, the reminder can adopt a friendly tone by enclosing the receipt, since we act on the assumption that there has been no intention of default. On the other hand, when more than 15 days have passed and the date of the next billing is approaching, the tone should be firmer, and include a mention of the interest and commission that are running for the delay.