Debt collection is often treated like a confrontation, but in reality, it’s a process, one that works best when it’s structured, documented, and handled professionally. For creditors, the goal is simple: collect what is owed without wasting time or creating unnecessary risk. For debtors, the goal is to resolve obligations in a way that protects stability and prevents the problem from growing.

This guide covers practical best practices for both sides and explains what “good” debt collection looks like when done correctly.

For creditors: Best practices that increase recovery rates

  • Build strong terms before you extend credit

Most collection problems start at the beginning. Use written terms that clearly state:

  • Payment due date (Net 15/30/45)
  • Late fee policies (where applicable)
  • Dispute windows (how quickly issues must be raised)
  • Accepted payment methods

Clear terms reduce “confusion” arguments later.

2) Invoice correctly and immediately

Faster invoicing leads to faster payment. Ensure invoices include:

  • Accurate legal business name and address
  • PO number (if used)
  • Line-item detail and totals
  • Due date, payment instructions, and contact for billing questions

Errors and missing details create delay.

3) Use a consistent follow-up cadence

A predictable schedule beats emotional chasing. For example:

  • Due date reminder (3 days before)
  • Day 1 past due: polite reminder
  • Day 7: second reminder + call
  • Day 14: past due notice + deadline
  • Day 30: escalation notice
  • Day 60: collections placement consideration

Debt recovery often depends on consistency more than intensity.

4) Keep communication factual

Avoid personal language. Use:

  • Invoice number, due date, amount owed
  • A payment deadline
  • Options (pay now, plan, settle if needed)
  • A clear next step if ignored

5) Document everything

Keep a clean timeline of:

  • Sent invoices and statements
  • Calls, voicemails, emails
  • Debtor responses and promises
  • Dispute claims and how they were handled

Documentation strengthens leverage and keeps the process organized.

6) Consider professional help when the account stalls

If the debtor is avoiding you or repeatedly delaying, a collection partner can save time and improve outcomes. For consumer debts, debt collectors must follow the FDCPA’s requirements for covered debts.

For debtors: best practices to resolve debts responsibly

  • Don’t ignore the debt

Silence usually increases pressure and reduces options. If you can’t pay immediately, communication helps.

  • Ask for details

If you don’t understand the debt, request:

  • Itemized breakdown
  • Dates and invoice numbers
  • Supporting documents if needed
  • Offer a realistic plan

A realistic payment plan beats a promise you can’t keep. If you propose a plan, be specific:

  • “$500 on the 1st and 15th” is better than “I’ll pay something soon.”
  • Get agreements in writing

Confirm payment plans, settlement terms, and due dates in writing. This protects both sides.

  • Prioritize and prevent repeat issues

If cash flow is your issue, evaluate:

  • Your billing system
  • Your pricing and margins
  • Your payment schedule with clients
  • Whether you need renegotiated vendor terms

The “healthy middle”: Resolving without drama

Most debts resolve when both parties focus on:

  • Clear documentation
  • Reasonable options
  • Defined deadlines
  • Consistent follow-through

When the system is clear, conflict often drops.

Legal considerations in debt collection

Both creditors and debtors should understand the legal boundaries involved in collection efforts. Creditors must avoid harassment, misrepresentation, or unfair practices, especially when dealing with consumer debt. Debtors have the right to request verification and dispute claims within the allowed time frame. Knowing the applicable regulations, such as the Fair Debt Collection Practices Act (FDCPA), helps ensure the process remains compliant, respectful, and focused on resolution.

Closing

Debt collection doesn’t have to be chaotic. Whether you’re a creditor or debtor, structure and professionalism create the fastest path to resolution.

JMH Collections supports businesses pursuing overdue balances with a consistent recovery process designed to move accounts toward resolution efficiently.