Just like in the business to consumer world, business to business transactions have the potential to go unpaid. A business customer may have a slow period where revenue simply isn’t enough to cover bills coming in, and that often includes an invoice for a product or services rendered.
When the standard methods for collecting an unpaid bill from a business go unnoticed, companies do have the ability to encourage payment by reporting delinquencies to the credit bureaus, hiring a collection agency, and taking the individual or company to small claims court.
1. Utilizing the Business Credit Reporting Agencies
There are three major credit reporting agencies that manage business credit reports and scores: Dun & Bradstreet, Experian, and Equifax for Business. Each offers the ability for other businesses to report delinquent accounts, but only when the reporting business is a member of the bureau. Membership requirements to be a data furnisher vary from agency to agency, but general guidelines are as follows.
Dun & Bradstreet
The largest reporter of credit information for business is Dun & Bradstreet. The organization offers companies of all shapes and sizes the ability to report accounts receivable directly to the agency.
Businesses must be able to securely transfer files in an approved format and allow Dun & Bradstreet to review the information provided. Any delinquent accounts can be noted once the initial file transfer is complete.
Becoming a data furnisher can be done online, or additional details about the process can be gathered by calling 1-844-705-1411.
Experian for Business
Companies may also want to utilize Experian for Business to report delinquent business accounts. The data furnishing rules for business members with Experian are simple. Businesses must have a method to transfer files securely to Experian, and they must be able to update data on a monthly basis.
Information about the process to become a data furnisher can be found online or by calling Experian at 1-800-478-0650.
Equifax for Business
The third option for data furnishing for delinquent business accounts is reporting to Equifax for Business. Like the other two reporting bureaus, Equifax allows businesses to report delinquency information regarding business accounts through its online data collection system.
More information about business membership can be found online or by calling Equifax for Business at 1-800-879-1025.
2. Hiring a Collection Agency to Collect Business Debt
As a business, you also have the option to outsource collection efforts if reporting to the credit agencies doesn’t have an impact on the customers who owe. Collection agencies take on the responsibility of contacting companies that have unpaid, delinquent accounts, but at a cost.
Some agencies may keep up to 50% of what they are able to collect from customers but receiving a portion of what’s due is often better than nothing at all. A list of certified commercial collection agencies can be found here.
3. Using the Small Claims Court to Collect Business Debt
When reporting to the business credit bureaus or hiring a collection agency isn’t feasible, a business may utilize their local court system to collect on outstanding debts.
Filing in small claims court does not require as much of a financial burden as a lawsuit with attorney representation, and this process works well for smaller businesses attempting to collect smaller debts. For larger delinquent accounts, a lawsuit may be filed with the help of an attorney.
Final Thoughts Reporting Delinquent Business Credit Accounts
Reporting delinquent business accounts not only provides one strategy for getting the attention of non-paying business customers; it also helps maintain a record of financial and payment history for businesses across the board. Be sure to evaluate all options for payment recovery before selecting the method that is best fit for your business.
If you are looking for credit reporting information regarding delinquent accounts for consumers, check out our guide.
