You need a healthy cash flow to run a small or medium business. So, when your past due customer receivables start piling up, it’s not something you could lightly brush aside. These overdue invoices can seriously compromise your access to working capital and can ultimately put your business operations in peril.
When it comes to the debt recovery process, small firms are usually at a disadvantage as compared to bigger corporate counterparts, as they have easy access to resources and can deploy trained, dedicated debt collection Brisbane departments. With smaller businesses, typically this role either falls on some “lucky” worker who’s already juggling multiple roles and has limited debt collection training, or on designated bookkeeper.
One of the most vital factors that’ll determine the success of your debt collection efforts is the level of preparedness and knowledge with which you approach those efforts in the first place. Here we’ll discuss a few valuable tips on the small business debt collection process that will make their task easy.
When you should consider a debt seriously overdue?
After 90 days, a customer account can take on a delinquent status. You should keep in mind that you have limited chances of recovering this debt. With the passage of time, the likelihood of cashing further plummets to around 46 per cent, and to only 19 per cent a year later!
“Good Debt Collection Tools and Policies Means Successful Debt Collection”
- Record your customer details clearly and accurately.
- Develop clear and thorough credit terms and conditions.
- Incorporate assertive debt collection tactics.
- Send out a series of debt collection letters starting with a mere warning and finally demanding a payment before you send the matter on to a third party.
- Request a face-to-face meeting.
- Try a series of debt collection phone calls. Freeze or close the customer’s account.
- Conduct an annual evaluation and review of the debt collection process.
Go to small claims court for recovering your unpaid customer debt
Some companies also use the threat of going to court for debt recovery just as a scare tactic so that their debtors pay out. Although there is an increase in the number of claims being filed in Australia, claimants are not able to collect their debt even after winning cases. This is mainly because the claimant is solely responsible for collecting the debt afterwards. Usually it has been seen that small claims courts are a hassle that should be avoided. Instead, the best way to go is to hire a debt collection Brisbane agency.
Using a debt collection Brisbane agency for your past due accounts
The use of a debt collection Brisbane agency http://comparedebt.com.au/ for recovering your overdue accounts is definitely the most popular and trusted option among small and medium business owners, and with good reason. The biggest advantage of using a debt collection service is that their team takes over the entire burden of sending proper collection letters, making phone calls, and then negotiating payment. Businesses are thus free to focus their energy where it matters the most – on running their business!
All in all, by following all of the aforementioned strategies and tips on effective overdue debt collection, you can greatly increase their chances of recovering all or part of your past due receivables.