Many of the past due debt situations I encounter could have been avoided with better communication between the parties.
Most commercial creditors are willing to be flexible with repayment if they are kept informed of a debtor company's financial situation when times are difficult. These problems usually are the result of not being paid in a timely manner on their own accounts receivable, causing a domino effect.
When communication stops, commercial creditors have little choice but to escalate collection actions by sending demand letters, retaining outside collection agencies or attorneys and, eventually, filing lawsuits to collect. By keeping the lines of communication open and explaining the reasons for late payments, a business owner can often avoid or delay these stepped up collection actions and retain desired relationships while they work to get their finances in order.
Scott F. Soape
