Companies start facing cash flow problems because they are unable to collect from their customers. Debt collection slowly eats into a company’s liquidity until it can no longer meet its suppliers’ obligations. On individual level, prudent money management calls for a serious relook on how you recover money other people such as employers owe you in order to avoid a constant worry of visiting your Houston bankruptcy consultant. Below are a few tips that will help you overcome inefficient debt collection and see you out of the Houston bankruptcy court.
Negotiate reasonable payment schedule
The best way to avoid a problem is avoiding it in the first place. Try to negotiate a clear payment schedule with your customers, employer and those who owe you money. This ensures that you have a solid cash flow base to meet obligations to your creditors. In fact, a good payment schedule helps you avoid a lot collision with your customers.
Know your rights
Get a good Houston bankruptcy and debt collection lawyer and get as much advice as you can get about your rights. This ensures that you know when to collect and liquidate properties of those who owe you money, when to sue them, and when to give them a break. Knowing your rights is also important as it helps you plan for any eventualities.
Proper Record Keeping
Records are an important element of debt recovery process. You have the evidential documents that can help you track what you are owed and if there are disputes, the court can verify what you are owed through the records. It is important to note that records are important for planning. If a debt looks like it will never be paid, most prudent money managers write off the debt and if the money is later recovered, it is accounted for as an income. This method of accounting ensures that money that is unlikely to be paid is not put into any plans.
Grow some thick skin
Sometimes, the people who make you file for bankruptcy are close friends or relatives. A close friend is hard to treat like a stranger when collecting debt. However, to be a prudent money manager, you need to learn how to live with offending this people. You cannot expose your financial stability to emotional whims and family ties. Make sure that no matter what, you can recover a debt. Another way of dealing with this situation is agreeing with your friends and relatives that you cannot loan them money without security so that if they fail to repay the money, you can liquidate the collateral and recover your money.
Get all communications in writing
Written documents record details. Details are what you will require when collecting debts through a court process. Written documents are always preferred in formal communication. Ensure that the documents, whether hard copies or soft copies are well taken care of. A good example will be to have a backup of the soft copy of all your customers list and money owed.
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