Offering services or products in credit and then not getting the money back at the right time, this must be the worst nightmare for any business owner. After all, you are definitely not interested to let your money go in the market when it is necessary to keep the operation of your business go smoother and production uninterrupted. So, it is necessary for you to get your money recovered.
Now, when you are trying to get the debts back, you might end up finding out that the debtor is avoiding to pay the money as they are supposed to be. In such a predicament, either you have to initiate the recovery process or you have to seek help from a collection agency who will take care of the money on your behalf. However, what if you get to understand that the debtor might not pay beforehand? Well, there are always some red flags that will indicate that you are dealing with someone who might not be able or interested to pay you back. What are the red flags I have mentioned? Take a look at the following points to know more.
Sudden Relocation without Prior Notice
This can be tricky. Well, after availing your services and purchasing your products on credit, you might not be able to connect with the client. Maybe the phone number does not exist anymore. Maybe you are failing to connect with as the office is not the same location anymore. Or worse, all your calls and emails are going unanswered and you are getting to know from some other sources that the company has relocated to a different place. In any case, this can be a big red flag that will tell you that there are risks that your debtor will not pay you for the services that they have availed. In such a situation, hiring credit collection services becomes the only option that can help you locate the debtor and get the money back.
Marital Problem or Death
These things are unpredictable. But when they happen, it can take a serious toll on the business and finances. So, if you get to hear that your client or customer has been through a recent marital problem or getting a divorce, it is necessary for you to make sure you are not getting caught up in the mess and your money is not getting lost in the whole turmoil. If the client or the owner of the company dies, it is obvious that the firm will go through a breakdown which can be financially challenging too. In such a situation, find out who is going to take care of the dealings of the company. Connect with them so that you get an assurance. Or if they have failed to pay the money on time, try to find a way to talk and come to a settlement that will be suitable for you both. But no matter what, don’t ignore this.
Competitor’s Call for Credit Reference
This is another and often ignored sign for debt collection. Maybe the date of payment is not near. Maybe you are not seeing any problem from the debtor’s end. But if you get a call from some other services or worse from a competitor of your refereeing to the debtor’s credit status, then you have reasons to worry about. When another company is looking for credit reference, this means that the debtor has purchased something from them too in credit which is a huge red flag as a company’s potential financial crisis. Try to connect with the debtor to find out what is the status of your debt.
So, now as you know about these red flags, what are you waiting for? Look out for the red flags and when necessary, connect with a debt collection agency for help.