Frequently Asked Questions
Can the client do ongoing work for that debtor or will sending a debt to a collection agency ruin my ongoing relationship?
Yes, you can continue doing ongoing work. We are a third party to resolve an issue if required. Sometimes there has been a misunderstanding and we can assist in identifying this.
Your staff may not be educated in negotiation skills or may not like debt collection. They may be time poor or don’t fully understand the importance of cash flow for business.
Matters are handled professionally and assertively (not aggressively). Testimony to that is sometimes our debtors are so impressed with how the matter is handled they become clients. Our trained staff are familiar with ACCC guidelines and our company is a member of the professional organisations Institute of Mercantile Agencies and Australian Institute of Credit Management.
Spending time and developing good processes to minimise risk as your business grows is a must for any business.
These processes begin at engagement with your new client. Have you checked their credit worthiness…CRB’s Credit Reporting Bureaus or Agencies are a good start rather than checking with their supplied referees?
Ensuring you have up to date terms and conditions which are specific to your business practises are crucial. They must also include a default clause so that costs of debt collection can be added to the debt. This will give you an edge over other suppliers for payment. E.g., your business has consequences for not paying on time e.g. Telstra account or discount for paying utility bill on time.
Do you have a dedicated Accounts Receivable Manager or team skilled in debt collection who understands the importance of this task? Is there a time frame that they follow? Are they familiar with the process to escalate a debt?
Do you use a credit reporting bureau to monitor “at risk” clients? We can provide credit reports and offer this service for you for a small fee (starting at $30 plus GST)
What are the warning signals that a debtor isn’t going to pay and when do you know it’s time to send a debt across for collection?
The debtor promises payment on a specific date and it does not arrive. We occasionally still hear excuses such as the cheque is lost in the mail! They may also blame C-19 and say that their industry has been heavily affected. They may continually ask for details to pay the account despite prior communication or their online banking and/or credit card were hacked are a good indication.
Their payments are declined when put through.
The debt suddenly becomes disputed after hearing other previous excuses and refuses to pay any or all of the debt.
The debtor ignores all communication whether it be by phone, email or mail. You may receive return to sender mail.
You are hearing rumours from others in your industry that the debtor owes other people money. If you are a member of Creditor Watch you may be receiving Mercantile agency alerts, insolvency alerts or notices of court judgments with regards to this debtor.
At the commencement of engaging with the debtor, they may be reluctant to sign your Terms and Conditions or Personal Guarantees They may ask for payment on “their” terms which should be a red flag.
What information do I need to provide if I am sending a debt across for collection? Will my information be safe? What is the usual debt collection process?
We provide a free phone consultation regarding the matter. Sometimes there may be a meeting. (according to size and complexity of debt). We discuss the history as to why the debt remains unpaid and discuss a strategy to collect the debt.
If you are a new client, we request all information be sent across to us electronically including any outstanding invoices, terms and conditions and any communication between the parties.
We require your bank account details as we prefer the debtor pays into our trust account. That way we can monitor expected payments. As we do banking every Tuesday and Friday we can then deduct our agreed commission and remit the balance of the funds to you.
Our systems are backed up and information is stored in the cloud and also off site. A copy of the Certificate of Compliance with ISO/IEC 27001:2013 for the Provision of Secure Data Centre Facilities is available on request.
Our usual debt collection process consists of 3 letters that escalate in intensity and the final letter is a complimentary legal letter of demand. These are teamed with phone calls to resolve the matter. If the debt remains unpaid, we discuss a sensible strategy to escalate the matter. It may mean taking legal action with our associated law firms.