When should you engage a professional or your bookkeeper to collect your debtors?
If the debt is not recovered after friendly reminders, informal negotiations and a letter of demand, it might be time to decide to engage a debt collection service or a bookkeeping company that specialises in this. Using a debt collection service goes one step further than sending a letter of demand because it signals to the client that you have decided to hand the matter over to professionals. This could further strain your business relationship with the client, however sometimes it may be more important to get the money you are owed.
What methods do we use?
Initially we will send a ‘letter of demand’ to the debtor demanding that the debt is paid by a particular date or legal action may be taken. If necessary, we will issue a second, ‘final’ letter of demand or follow up with a ‘phone demand’. We can also refer legal action on your behalf.
Our collection systems are automated and we can integrate our debtor collection apps onto your accounting system be it MYOB, Xero or QuickBooks Online.
Case Study: What it means to engage us on an annual basis
John is a small business who provides computer services to other small businesses. After losing $11,000 in one year from several unpaid bills from customers, he decided to engage us on an ongoing basis. He paid an annual fee of $3,000 for this service. On all his contracts, quotations and invoices, John now includes terms and conditions of payment provided by us. They state that any costs associated with recovering the debt will be charged to the client.
In some cases, if a bill is not paid on time, John asks us to chase the payment. We do this until the debt is paid. John doesn’t use us for all his unpaid bills because sometimes he wants to maintain the business relationship so he can get more work from the client in the future.
John sees the annual fee as a form of insurance and a way to reduce worry and stress about money.
This is why we love collecting money … it takes away one of the added pressure of running your own business.
Let us help you today. Call us on 1300 884 722 or email@example.com