| Getting out of bad debt
with debt help from a debt consolidation program can be the difference
Bad debt is money owed to you that you can't collect. You may write
off your bad debt on your income tax. If you don't pay a creditor
then your debt is considered bad debt. A way to avoid being part
of the bad debt syndrome is to get debt help from a debt consolidation
company. You can get free
debt consolidation help and ask the credit counselors how you
can stop from becoming the next bad debt statistic.
The debt consolidation counselors can give you the debt help information
you need to stay as far away from bad debt as possible. Before you
get into bad debt find out how a debt consolidation counselor can
help you save up to 50% on your monthly bills. Debt consolidation
counselors can negotiate on your behalf to lower your interest rates.
With lower interest rates, your payments are reduced, and so are
the chances of you falling into bad debt.
If you are a business owner, you know exactly what bad debt is.
Bad debt can be a problem and has even forced some companies to
go out of business. Business owners can read the following information
to get a better idea on how to avoid bad debt, but we also recommend
you read this information if you are not a business owner. Bad debt
affects everyone and the more you know the more you will want to
avoid bad debt.
Avoiding Bad Debt In Your Business
Having the money you're owed sitting in someone else's bank account
can seriously interfere with your business' cash flow. If many of
the clients or customers you invoice are slow payers, maybe it's
time to look at your invoices; they could be contributing to your
collections problem, known as bad debt.
Does the invoice you're sending out encourage action or inaction?
For example, many invoices are simply marked, "Payable upon
receipt". Invoices so labeled are saying to your customers
or clients, "Pay me when it's convenient for you," instead
of "Pay me now." Those inclined to be slow payers will
find the built-in excuse especially convenient; we've all heard
the line "The check is in the mail!"
Worse, some invoices have boxes such as "current", "30
days", "60 days", "90 days", and "over
90 days" that broadcast the aging of the account that's due.
Using an invoice that's formatted this way is also broadcasting
to those inclined to be slow payers that you're willing to serve
as a creditor; there's no reason to pay you right away. This is
encouraging bad debt.
Instead of using invoices that encourage inaction, use invoices
that encourage prompt payment. All of the invoices you send out
should state a specific date of payment, such as "Due on November
30, 2001", rather than "Payable upon receipt", or
"Due in 30 days". People are much more likely to pay attention
to a specific payment date, and you eliminate the possibility of
misunderstanding or loose interpretation.
You can also encourage prompt payment of invoices by offering an
incentive to pay on time. Many businesses, for instance, offer a
small discount for paying within 10 days of an invoice date. A discount
of two per cent for payment within ten days is common.
Don't let your invoices contribute to collections problems and
make your prompt payers feel as if they're being unfairly treated.
Using invoices that state specific dates that payment is expected
and offer an incentive to pay promptly encourages action - and will
help get the money you're owed flowing into your bank account.
|
