In today’s business world, small business owners write off thousands of dollars of unpaid debts due to them. In reality, most of these write-offs occur unnecessarily, and small business owners simply do not pursue avenues available to them to collect these unpaid amounts they have a right to collect. It is important to learn what methods are available to you as a small business owner and how you can collect what is rightfully yours.

Attempt to Settle

Before rushing into court, it may prove to be both time and cost effective to give your debtor an opportunity to settle the matter between the two of you before any third-party intervention is taken. Write a collection letter to your debtor and make sure it includes what the debt was for, the amount of the debt, what methods of payment you accept and where they can send payment. If you are willing to accept an amount lower than the full amount of the debt as full and final settlement, explain this in the letter and set out what amount you will accept as full and final settlement and how long the offer of settlement is valid. Also, if you are willing to accept weekly, bi-weekly or monthly payments from your debtor to pay off the debt, set this out in the letter as well. Ideally, it is wise to offer payment arrangements and attempt to work with the debtor as to what payments he or she can afford, as this may be the only way you will receive any money from that debtor.