Bad debt happens everyday all over the world. Companies worldwide lose billion of dollars every year due to the fact that their clients are unable to pay their outstanding invoices. For small companies, bad debt can put them into a risky financial situation by tightening their business cash flow. In this article, we will discuss how you can recover your bad debt.

When you grant open credit to your foreign customers, unforeseen circumstances can develop that can affect your collections. Or, if you have made the sale based on a letter of credit or some other type of documentary collection, things can occasionally go wrong. In these situations you will be faced with the need to pursue other measures to collect from your international customers on your unpaid invoices. This is where an international debt collection agency can help.

A debt collection agency will attempt to recover your bad debt in exchange for a commission on the recovered amount. This scenario does not require any additional payment from your side and is really risk free. The commission may sometimes be high but you will recover a large percentage of your debt therefore you really have nothing to lose in the end. Keep in mind that these agencies are staffed with experienced specialists and lawyers to increase your chances of recovery.

Unfortunately, you will sometimes need additional legal actions. In this case, make sure that you negotiate the fees beforehand in order to avoid any unpleasant surprises. Always try to find collection agencies that have a strong international network to get the best legal support.

It is important to ask yourself if pursuing your client is worth your time and money. Sometimes the amount is quite small therefore you can write it off as bad debt expense in your accounting.

David Bess specializes in assisting companies to successfully trade with Latin America. To browse to his valuable resources, tips and links, click here por mayor