Resources

The Collection Process

Best Practices for Avoiding Debt

Know Your Buyer

Learn as much as you can about your buyer before you begin a business relationship with them, and particularly before you begin extending credit.

Offer Tighter Credit Terms

You are not a bank. Your credit terms should be a convenience for your customers but must ultimately be based on their legitimate ability to pay. Offering loose or lenient credit terms in hopes of driving sales, particularly to customers who will not honor their commitments to you, is not a sustainable business practice.

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Require Blanket Letters of Credit

A letter of credit from a banking institution is another means of transferring risk for purchases. Although a letter of credit is not cash in your bank account, it is an assurance from a financial institution that the purchase is backed up by a credit line and that the purchase will be paid for.

Use Clearly Defined Terms and Conditions

Every invoice or bill of sale should include very clear and specific terms and conditions that document and reinforce your credit and collections policy. You want to make sure that a customer cannot claim that they were unaware of when or how they were supposed to pay you.

Comprehensive Credit Policy

Your credit policy should establish what a customer must do in order to purchase from you. Requiring upfront payments or payment upon delivery might make sense for first-time customers. If you are willing to accept deferred payments from certain customers, spell out the terms precisely.

Accept Credit Cards

Credit card payments transfer the risk from you to the credit card company while functioning like cash to your business. Most legitimate companies have substantial credit limits and will often have the ability to cover even large payments via credit card.

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Require Sales Contracts or Purchase Orders

Closing a sale with a handshake and a smile has become a risky approach to business. Use a sales contract or purchase order as a binding legal agreement that documents the terms of the sale and what is included in the purchase, as well as how and when it will be paid for.

Obtain Credit Insurance

Credit insurance also transfers the risk of extending credit. It protects your downside at a cost and can help to mitigate the financial ramifications of a credit default. Credit insurance is a stopgap measure, however, and should not be used to support easy or loose credit policies.

No Open Credit

Open credit terms allow a buyer to receive goods or services with a promise to pay at a certain date. There is significant risk with open credit terms, even with established customers, and it is best not to offer them.

Require Larger Initial deposits

A large deposit helps ensure that the customer has a vested interest in paying you. One approach is to require the initial deposit to at least equal the costs of fulfilling the order. If the buyer defaults, you will lose your profit, but at least you will have covered your costs.

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Perform Credit Checks

Pull regular credit reports when you begin working with a new customer, and be sure to continue to track changes in their credit report as a part of the continuing relationship. Using a credit-scoring system similar to what a bank might use before granting a loan is a best-practice method of establishing the terms you are willing to offer a new buyer, if any. Credit scores change, so it’s a good idea to check credit at least annually for ongoing customers.

Create Strong Internal Systems

It is important for everyone involved in the customer relationship to be aware of a customer’s credit and billing status. The sales force, customer service, and shipping departments should all have access to at least some level of account-status information, particularly if an account is flagged for credit or payment delinquencies.

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Don't Use Easy Credit To Sell

Ensure that your credit policy is clear and details exactly what is required to purchase from you. Even though it might slow down your sales process, selling something and then not getting paid for it is an expensive mistake.

Frequently Asked Questions

What is Debt?

Debt is the amount of money owed to someone for something. The debts collected by Assurance Global are typically monies due for goods or services that have been received but not paid for.

How does debt affect me and my business?

If cash flow is the lifeblood of every business, debt is like the blockage of an artery. Many businesses borrow money or use other forms of financing to sustain business operations, which represents one type of debt. Customers who have not paid for what they have received create another form of debt. Debts owed by customers, called “accounts receivable” or “trade balances,” can cripple or even kill a business if allowed to blossom out of control. Purchasing inventory, paying workers, and running a manufacturing plant all become much more difficult-if not impossible-if a business is unduly burdened by debt.

What is the collection process?

Assurance Global uses a highly structured and systematic collection process to recover what is owed to you. Our process has been refined and perfected so that we can recover your trade balances quickly and efficiently. A complete description of our collection process can be found here.

How much does it cost?

We charge you a fair percentage of what we collect for you. This is called a contingency fee, in other words our fee is contingent on our success. If we do not collect your money for you, we do not get paid.

Do you charge any upfront fees?

Unlike most of our competitors, there are never any upfront fees with Assurance Global. Our services are rendered on a strict contingency-fee basis.

Why should I use Assurance Global?

There are many reasons to use Assurance Global when you need to recover delinquent accounts receivable, but the biggest reason is that we offer you the highest chance of success with zero upfront costs. We have built our company around an unmatched global network of highly skilled and experienced debt-collection law firms combined with a proven and effective debt-collection process. Just as importantly, because we bill you strictly on a contingency-fee basis, there are never any upfront costs.

Where are your offices located?

Our corporate headquarters is located in the U.S. in Wilmington, Delaware. We also have regional Asian offices in Ho Chi Minh City, Vietnam, as well as in Shanghai and Qingdao inChina. You can find the street addresses for each of our offices here.

Where are you able to collect?

We can collect wherever you do business and wherever you have customers that owe you money. We have put together a highly capable network of over 950 law firms worldwide to give us unparalleled reach and global capabilities.

How can I contact you?

Contacting Assurance Global is easy. Call us by phone, fax us your information, email us, or fill out our easy contact form. You can find all of the information you need to get in touch on our Contact Us page.

How can I learn more about your services?

If you have customers who owe you money, the best way is to send us an email. You can also review our About Us page, as well as our Resources page. Once you understand who we are and how we work, you will quickly realize what sets us so far apart from our competition.

What do I need to start the process?

Our proven process is very straightforward. We make it as easy as possible for you to put us to work for you. When you’re ready to submit your case-once again, without any upfront fees-simply download and fill out our case submission form and send us an email.

What is a statute of Limitations?

When a customer defaults on an open invoice by not paying you within your credit terms, you only have a certain amount of time to commence a collection action. This restriction is called a “statute of limitation,” and it varies based on the location of your customer. If this time expires before you try to collect, you essentially relinquish your rights to recover what is owed to you. For that reason, if a customer owes you money, time is of the essence-get in touch with us right away so that you don’t lose your right to collect.

Even though my customer owes me money, I don't want to risk losing their business by being too aggressive. How long should I wait until I seek your help in collecting what is owed to me?

You should first ask yourself how valuable the customer really is if they are refusing to pay you. Is a customer who doesn’t pay really a worthwhile customer? You should first ensure that your business is set up to reduce the occurrence of delinquent invoices. Assuming that these measures are in place, if you have a slow paying customer, we recommend that you place the account for collection as soon as it becomes delinquent according to your defined terms, conditions, and credit policies. Our experience clearly shows that the sooner a collection commences, the greater the likelihood of success in collecting.