Making dreaded debt-collection calls easier

 

Making dreaded debt-collection calls easier

 

Keeping on top of your creditors starts long before you pick up the phone to make an uncomfortable call to an outstanding debtor.

 

Debt collection is one of the least enjoyable aspects of running your own business, but businesses small and large spend time and money calling clients about outstanding debt.

 

There are a few things you can do to lessen the burden. After all, your billing cycle starts when you make first contact with a client.

 

It can pay, literally, to establish payment terms right from the start of the client-business relationship. You can do this with the following points:

 

  • terms and conditions that are easy for clients to understand
  • ensuring clients sign a copy of your terms and conditions, with no exceptions
  • sending out correctly charged invoices. It sounds silly, but businesses can forget items, or may even forget to send a bill at all
  • ensuring your invoice has your payment terms printed clearly, along with any penalties that may apply for late payment
  • including a ‘due date’ on your invoice. It makes it easier for creditors to manage their payments
  • clearly printing the payment method and providing any bank account details or addresses
  • including your ABN! Your invoice isn’t a ‘tax invoice’ without it
  • running credit checks on potential clients by calling referees provided.

 

If you have outlined your payment terms and have a client who has not paid by the due date, it’s time to get on the phone.

 

Don’t wait until payment is overdue by weeks. If your terms are 30 days, you can call on day 31.

 

When speaking to a debtor, try to get a specific date for payment. If the payment doesn’t arrive on the day nominated by the client, call back the following day.

 

Keep calling and arranging payment. Often, simply maintaining contact will result in payment of the debt.

 

Stay friendly and professional, and remember when contacting a debtor, you must do so in a way that protects the privacy and rights of the debtor.

 

The Australian Competition and Consumer Commission (ACCC) and ASIC collaborated to produce this guideline  to debt collection which helps creditors, debtors and debt collectors understand the do’s and don’ts of debt collection The guide ensures that all parties understand how Australian Consumer Law, the National Consumer Credit Protection Act 2009 and privacy laws and principles interact, ensuring that people can undertake debt collection in a lawful manner, protecting the rights of creditors and debtors.

 

If all else fails and your attempts are getting you nowhere, consider lodging the debt with a certified and licenced debt collector.

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