What Does a Business-to-Business Collections Lawyer Do?

By  //  June 11, 2021

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B2B Collections on Delinquent Accounts

While businesses turn to third-party collection agencies to help collect unpaid accounts from customers, businesses also need occasional help managing delinquent accounts of other companies who fail to pay.

This type of collection activity is known as business-to-business collections or B2B collections. The collection professionals who help businesses collect an unpaid debt from another business are usually collection attorneys. 

No one can argue that a business can stay viable if its customers pay them for products and services rendered on time. But, conversely, one customer who does not pay their account can hurt business profits, especially if unpaid accounts are calculated into thousands of dollars. 

You have a business to run and cannot be caught up in business-to-business collections. Whether you have small accounts or a large account in collections, this can prevent you from operating, meeting the payroll, and paying your bills. 

Some businesses seek the help of third-party collection companies, while other companies seek help from a commercial collection lawyer. If a collection agency cannot collect on a debt, the bad account is often sold to another agency and that agency may not be successful in its collection attempts. If that company does not pay you, it could mean financial ruin. 

Commercial collection lawyers present a higher level of professionalism and, most times, have better luck collecting bad accounts from other businesses. A company understands that it must be paid for products and services they sell to another company to stay in business. Yet, there are those companies who neglect paying you. 

Unfortunately, situations arise for a company that make it difficult for businesses to collect from one another. Non-payment of accounts has various reasons, from disputes to cash flow problems. However, for a company to remain profitable, bills must be paid. 

A collection attorney helps to collect on delinquent accounts quicker and find solutions sooner. In addition, a collection attorney can often prevent B2B relationships from declining, thus, saving a valuable relationship. A seasoned business-to-business debt collection attorney helps corporate clients recover money owed to them by utilizing specialized legal skills and knowledge in collecting significant debts that well-exceed $20,000 or more. 

The goal of this collection attorney is to avoid litigation through negotiations and a letter of intent to collect with a company’s debtors. This attorney understands that there can be extenuating circumstances for unpaid accounts and works hard to work with these unique circumstances and utilizes various civil methods to secure payment from a debtor outside the courtroom. 

Litigation costs too much time, and money and outcomes become uncertain, so it is much better to settle out of court. Additionally, restoring and further preserving relationships between business owners is vital to collecting past due accounts. This attorney supports professionalism at all times. 

Steps Toward Litigation 

A  commercial collections attorney takes specific steps to collect debt between businesses, which are as follows.

■ Letters sent to a debtor are seldom neglected when they come from an attorney. Debtors are more motivated to pay an account knowing that their creditor obtained legal counsel. 

■ Negotiations start regarding a settlement arrangement with the debtor. Can the debtor work out an agreeable payment through installments? Can the creditor discount the delinquent account to help the debtor?

■ We explore the reasons why the debtor became delinquent in paying their account.

■ We encourage both businesses to come to a mutual agreement regarding a settlement. 

■ If we have no success in settling, we will file a lawsuit to obtain a judgment. Sometimes debtors refuse to work towards a solution.

■ A commercial collections lawyer can take more steps towards litigation if all else fails and the debtor refuses to cooperate with negotiations. There are forms to file and timelines to adhere to. They take the work and worry off your shoulders so you can continue to run your company and work to collect the money that you need to run your company.

A Call to Action for Attorney Debt Collections

If you have a sizeable account or several small accounts you cannot collect on, and all of your efforts failed, give a commercial collections lawyer  a call today to explore your legal options.