Waiting Years to Get Paid Is a Mistake
If your business is like numerous others out there, you write off debts you are owed from time to time. It may seem like the convenient way out, but in actuality, you are just giving money away. That is no way to operate a business.
When you have overdue payments pending, contact your clients right away by sending out a notice letter. Give them a couple weeks for a response, which is a reasonable amount of time. If they do not respond to your conditions and have not met the terms of the deadline, hold them responsible. The best course of action is to take action right away.
If you are not getting any results from your initial warning letter, it is a very good time to hire a Canadian collection agency to handle the collection for you. You need to take action within months, not years since commissions are higher on debts that are more than a year old.
Study collection agencies before just choosing the first one you see on the web. Read their reviews and testimonials to evaluate each of them. Cross check each agency to get a better understanding of how they perform. Outsourcing your collections to the right agency is a lot more cost-effective than doing it in-house because you get rid of the risk of wasted resources.
If a collection agency is not successful in the recovery of your money, you will have to file suit in civil court. That is why time is so crucial. The longer you wait, the better the chance it could get tossed out by the judge for being over the statute of limitations. The statute of limitations in most provinces is 2 yrs for litigation against debts. The amount you can sue up for in each province differs. For example, Alberta is $50,000 and Ontario is $25,000. Check with your regional small claims court for the maximum amount you can file suit for and the statue of limitations.
A great recommendation is to outsource your collection efforts to National Recovery Corp. They are licensed and bonded all across Canada and they work on contingency, so you only pay if they collect your money. No collection, no charge - and that is how it ought to be.
NRC Collections is broadly considered one of the very best collection agencies in Canada and with justification. They take the risk off of you, they get the job done, and they recognize that accruing more debt on top of your existing debt is a big problem. Do your homework and research several agencies first, but once you do you will likely find that no one else even comes close.