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How Can Interest/Late Fees Can Reduce The Need For Debt Collection?

How Can Interest/Late Fees Can Reduce The Need For Debt Collection?

Collecting debt from your buyers can often feel like playing a game of catchup and can have a large negative impact on your company’s bottom line. If your clients are consistently late in their payments, your company will suffer. The best way to make debt collecting less frustrating is to not need to do it in the first place. By utilizing a preemptive debt collecting strategy in the contract writing phase, you can ensure that debt collection is not a hassle.

Why Should I Use Interest and Late Fees On Invoices?

The best way to prevent nonpayment or delinquency is by having companies pay a late fee on their invoice if it is not paid on time.  By including late fees and interest rates in your initial contract not only will this encourage your debtors to pay their bills on time, but it can also help your company earn additional income from late invoices. When a client does not pay an invoice, it can affect other companies down the line because they may begin missing payments as well if their cash flow is tied up in delinquency or frequent late payments.

There are clear benefits to adding interest rates and late fees to your client’s contracts, although many companies find it difficult to implement this system for fear of straining their relationship with their clientele. It should also be noted that many states have restrictions on how much interest can be charged for late payment.

Why Choose AWA for Your Transportation Collection Needs?

AWA operates on a contingency fee basis, meaning, if we cannot collect, you owe us nothing. If collection efforts are successful, our rates will be based on how old and how much the debt is, if there is a damage claim, and whether the debtor is in or out of business. If you have unpaid freight invoices and are not sure what to do next, call 662-892-8591 to speak with one of AWA’s client specialists today or Contact Us Directly!

For more information on our agency practices and methods, view our AWA Collection Process Page.

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