Debt Recovery Associates

Persuasive, Persistence, Professionalism

Good Vs Bad Debt Collection Strategies

 

how to collect debts

The strategies adopted by a business when collecting debts impact not only on the profitability of the business, but also the brand and reputation of the business.

This article looks at both good and bad debt recovery strategies and when it is best to hand bad debts over to a professional.

Poor debt collection strategies

Poor Good Vs Bad Debt Collection Strategies fail to recover debts, fail to build relationships with customers, and impact negatively on the image of the creditor business.

It is vital that businesses are aware that a current debtor may also be a current or future client. Poor debt collection practices may not only result in failure to recover that debt, but result in a loss of business in the future.

Businesses who handle their own debt collection through their accounts receivable departments need to be aware of the regulatory and legislative regime within which they operate.

Debtors are covered by laws that protect their privacy and other rights, and it is vital that debt collection practices do not infringe on these rights. Common mistakes include:

  • Revealing a debt (even unintentionally) to third parties, without the debtor’s permission.
  • Contacting a debtor too often, to the point where it can be construed as harassment.
  • Falsely misrepresenting that a request for payment is from an official source (i.e. using a government or solicitor’s letterhead).
  • Threatening to take legal action against a debtor, when there is no intention to do so.
  • Failing to record amounts paid by the debtor in a timely manner, causing damage to their credit score.
  • Using threatening or intimidating behaviour towards a debtor.

Of course, most business owners attempt to operate within the bounds of the law, and in fact many are are guilty of not doing enough when it comes to recovering debts. Poor debt collection practices of this kind include:

  • Not doing sufficient credit checks on customers before extending credit.
  • Not spelling out credit terms on invoices and documents.
  • Failing to pursue overdue debts in a timely manner.
  • Not having a credit policy in place.
  • Not training staff on correct debt recovery practices.
  • Waiting too long before handing bad debts on to a collection agency.

Effective debt recovery strategies

Businesses with effective debt recovery practices ensure an emphasis on setting out the rights and obligations of parties from the outset in any documented terms of trade, credit applications, or on invoices.

This makes the taking of recovery action at a later stage more straightforward, and ensures that the creditor business is in a strong position to demand payment.

Once recovery action is required, businesses ought to adopt set strategies which establish strict timeframes for recovering activities, including the issuing of demand letters, making of phone calls, and escalation of matters to legal proceedings or referral to a collection agency.

How third parties help

A better, and more cost effective, alternative to legal action is to hand the debt over to a professional debt collection agency.

A collection agency has a much better chance of recovering the debt for a number of reasons, including:

  • The agency has no pre-existing relationship with your client – they can be more assertive than you would be in collecting the debt, while ensuring all collection activities are within the law. The involvement of the agency indicates that the matter has been escalated, whereas the debtor may not have taken you seriously. They will be more inclined to pay if a collection agency is involved, as they will realise that you mean business.
  • They have more resources at their disposal – collection agencies are able to access information about the debtor that you may not be privy to, and can conduct searches to locate and contact a debtor that may have relocated.

Further, the referral of a debt to a collection agency provides the creditor business with peace of mind that all collections activities will be conducted in a compliant manner. This will protect the creditor’s brand name, while providing the creditor business with the opportunity to concentrate on growing their business rather than chasing debts.

No business likes chasing bad debts. It is time consuming, costly, and can have a negative impact on customer relationships. The best way to avoid this is to have good accounts receivable procedures in place, and to pass bad debts on to a reputable collection agency in a timely manner.

Professional Debt Recovery for you …contact

Debt Recovery Associates. Persuasive, Persistence, Professionalism

Town Office-View Park Towers ,10th Fl ,Utalii Lane /
L584-off UN Avenue, Gigiri.

P O Box 27859 00100 Nairobi, Kenya

Tel +254-20-221 1382/362

Cell: +254 721 636 404

Fax +254-20-2211386

Email; debtrecovery@dolphinsgroup.co.ke

http://www.dolphinsgroup.co.ke/debtrecovery/index.php

Dolphins Group

Are You Throwing Money Away by Chasing the Wrong Debts?

 

debt_recovery_associates

Every Accounts Payable department knows that there are two types of debtors: those who won’t pay and those who can’t pay. Identifying where your debtors lie will save you a great deal of time and money when trying to recover debts.

Won’t Pay vs. Can’t Pay

If a client won’t pay, your debt collection efforts are likely to have little or no effect. Your best recourse is to hand the matter over to a professional debt collection agency and pursue legal options.

If a client can’t pay, you may still have the opportunity to recoup part or all of the debt, though possibly over a longer time frame. However, any collection strategy needs to be weighed up with both ethical and legal obligations relating to debtor hardship. Unlike a debtor who won’t pay, those who can’t pay are worth negotiating with to try to find some sort of agreement that works for both of you.

Identifying those who won’t pay

There are some people who refuse to pay for goods or services, believing there will be no repercussions for their actions or that they can somehow avoid them.

Signs that your debtor falls into this category are if:

  • they avoid or ignore your attempts to contact them
  • they deny their liability for the debt
  • they blame someone else for the debt
  • they threaten impending bankruptcy
  • they change their name or address
  • they claim they didn’t receive the goods or service
  • they hide the goods to prevent them from being repossessed
  • they go on the offensive and threaten legal action.

The time and money spent chasing these debtors can be significant and you often end up with nothing to show for it. In these circumstances, it is usually better, and more economical, to leave the debt recovery to professionals.

Identifying those who can’t pay

Not all debtors are ill-intentioned. Many find themselves in circumstances beyond their control as a result of unemployment, a failing business, ill health or a number of other factors.

You can often identify debtors who can’t pay when they exhibit actions such as:

  • Contacting you first, before you contact them, and explaining why they are behind in their payments.
  • Being willing to negotiate on an alternative payment arrangement.
  • Applying for a hardship variation (if debt relates to credit), which is a formal request for you to vary their repayment terms.

Working with debtors who can’t pay

If you have identified that a debtor wants to pay you what they owe but are unable to for whatever reason, then you may want to negotiate an agreement that both parties are happy with.

Remember that the debtor could be a future long-term customer and their inability to pay may be only a temporary setback. As such, it is important to make your negotiations as amicable as possible in order to maintain the relationship.

The agreement might allow for the debt to be paid off in instalments over time or for a reduced amount to be paid in a lump sum now or at some time in the near future. The agreement, whatever the terms, should always be in writing.

The debtor needs to be made aware of the repercussions if they default on this agreement, and any defaults should be followed up promptly. To reduce the chances of this occurring, it is often a good idea to make this agreement somewhat flexible, giving them the best chance of honouring it. Initially, you should try to get them to pay as much of the debt as possible in the first instalment. Then ideally you should arrange for subsequent payments to be direct-debited from their account.

Finding an acceptable solution

Negotiating an instalment arrangement is often the fastest and most cost-effective way to deal with unpaid debts where a debtor does not have the means to pay all of the debt at once.  In the event legal proceedings are commenced and judgment obtained it is highly likely the debtor won’t have the assets to pay the debt and you will receive only a portion of the debt amount and incur significant legal costs in the process. Also, depending on the size of the debt, you may recover the total amount in instalments in a shorter period of time than it would take to issue proceedings, obtain judgment, bankrupt a debtor and recover your debt and costs.

Professional Debt Recovery for you …contact

Debt Recovery Associates. Persuasive, Persistence, Professionalism

Town Office-View Park Towers ,10th Fl ,Utalii Lane /
L584-off UN Avenue, Gigiri.

P O Box 27859 00100 Nairobi, Kenya

Tel +254-20-221 1382/362

Cell: +254 721 636 404

Fax +254-20-2211386

Email; debtrecovery@dolphinsgroup.co.ke

http://www.dolphinsgroup.co.ke/debtrecovery/index.php

Dolphins Group

 

5 Reasons Your Business Will Improve Today With a Debt Collection Strategy …

 

debt_recovery_amazing_blog

No matter the industry, debt collection is an essential part of business. The proportion of overall revenue that is written off as bad debt is significant. .

A comprehensive debt collection strategy will ensure your business maximises return for efforts. Below are the main reasons for having a comprehensive debt collection strategy in place.

 

1.Cash flow

Failing to maintain cash flow is among the most prominent reasons that businesses fail to survive. In particular for new and small businesses it is essential to have sufficient capital to pay running costs and purchase new stock.

The most basic reason for a comprehensive debt collection strategy is to ensure a consistent and steady cash flow that allows you to run your business as smoothly as possible.

2.Credibility

Put simply, if your debt collection strategy is weak, customers will take advantage of it. They may delay payments excessively or even avoid paying altogether.

You need to have clear credit policies and payment terms in place, and then make sure that your customers are aware of these from the start.

3.Self protection

A solid debt collection strategy can also protect your business from unsound debts. By categorising your customer base into debtors who are low, moderate and high risk, you can then adjust your credit limits and payment terms to suit each category. This helps to limit the likelihood of incurring significant financial losses.

An effective strategy will also allow you to better identify the reasons you have outstanding debts and categorise your late-payers. This will help you determine the most effective course of action.

4.Competitive Edge

Strengthening the collection end of your business can give you a significant edge on your competitors. If your methods of handling difficult payers are effective, you can open up the possibility of extending lines of credit to higher risk customers. These strategies should be designed by closely analysing the patterns of your debtors. Just small increases in efficiency can lead to significant monetary gains.

5.Focus

A sound debt collection strategy will give you more time to focus on the rest of your business. It will also help to remove the unwanted stress and wasted time that comes with constantly dealing with overdue payers. Your business will simply not be able to grow if you have to focus extensively on collecting money from sales that have already been made.

Other benefits

In addition to the fundamental reasons a comprehensive debt collection strategy is essential, other benefits include:

  • Costs – collecting debt costs money, through time, phone calls, emails, letters and effort. Streamlining your collection methods or outsourcing these to a debt collection agency often means that in the long run you pay less to get more. In fact, most debt collection agencies offer their services on a ‘no win no fee’ or ‘contingency’ basis.
  • Credit – the fewer bad debts you have to write off, the better your own credit rating will be.
  • Reputation – your good practices will reflect well on your brand as potential customers begin to see you as a reliable and respectable business to deal with.
  • Affordability – repeated bad debts will force you to pass your losses onto your customers, so less defaults means you can remain price-competitive.
  • Confidence – if you have shareholders, they will view your reduced losses favourably, which will reflect positively on your overall business practices.
  • Future growth – having greater control over your income allows you to make more accurate forecasts, giving you the opportunity to allocate resources more appropriately.
  • Morale – staff who see that their efforts are not going to waste due to losses will be happier, more loyal and more productive workers.

While debt levels certainly vary among industries, there is simply no reason why you cannot expect to be paid on time for the goods or services you provide. It is a matter of engaging in a thoughtful, consistent and focused strategy, either in-house or with the aid of a debt collection agency.

Professional Debt Recovery for you …contact

Debt Recovery Associates. Persuasive, Persistence, Professionalism

Town Office-View Park Towers ,10th Fl ,Utalii Lane /
L584-off UN Avenue, Gigiri.

P O Box 27859 00100 Nairobi, Kenya

Tel +254-20-221 1382/362

Cell: +254 721 636 404

Fax +254-20-2211386

Email; debtrecovery@dolphinsgroup.co.ke

http://www.dolphinsgroup.co.ke/debtrecovery/index.php

Dolphins Group

 

How to Collect Your Debts Through The Courts

debt_recovery_aasociates_Amazing_blog

 

If you have exhausted all other avenues trying to recover a debt that is owed to you or your business, you may want to explore the option of collecting the debt through the courts. Obviously, it will depend on the amount you are owed, but attempting to gain a judgement from a court of law can be a highly effective course of action.

Once you have obtained judgement, the amount awarded by the court must be paid by the debtor or else they will face serious legal consequences. Where final demands and solicitor’s letters might have failed to sway your debtor in the past, a judgement from a court gives you the legal power to enforce your claim.

 

Before launching any type of court case, it is important to remember that you should always obtain legal advice to determine your chances of winning, as well as to discuss the necessary steps throughout the process. If you lose the case and the debtor has hired their own legal representation, you may end up having to pay some or all of their legal costs.

Obtaining a judgement

The steps involved in obtaining a judgement from a court will vary depending on the court in which your matter is issued. As such, it is essential to seek legal advice from an expert in your local jurisdiction. Generally, the first step will be to file a Statement of Claim (SOC) with the court. The SOC should reference any contracts, agreements, terms or other communications surrounding the debt.

Once you have filed a SOC, it must be served on the debtor, or defendant. Each state has specific laws for filing and serving SOCs, as well as the amount of time that the debtor has to reply.

If the debtor does not reply to your SOC within the time provided by the legislation, then you are able to file for a default judgment to be made in your favour.

In most jurisdictions it is necessary to prove that the correct documents have been served on the debtor when an application for default judgment is made. This is why it is generally a good idea to use a process server to serve documents to ensure the relevant legislation is complied with. Also, where a document is required to be served personally, it is advisable to obtain the services of a process server as serving a document yourself can often lead to the debtor/defendant becoming aggressive and confrontational.

Enforcing a judgement

If a defendant does not comply with a court order, enforcement action can be taken, which might include the issuing of a:

  • Writ for the Delivery of Goods (seizure of goods belonging to you)
  • Writ for the Levy of Property (seizure of property to cover the debt)
  • Garnishee Order (seizure of money from the debtor’s wages or bank accounts)
  • Examination Notice (to ascertain the debtor’s financial position)
  • Bankruptcy Declaration
  • Liquidation Notice (if the debtor is a company).

As well as the debt, you can also claim the interest accrued from the time the judgement is made (known as post-judgement interest). Your legal representative can assist you in calculating this amount.

A more likely scenario following a judgement is that the debtor will seek to come to some kind of arrangement, such as paying off the debt in installments. If they do not have much in the way of assets, this may be the best possible outcome that is achievable.

 

Hopefully, you will never have to go to the lengths described here to recover a debt. A good way to ensure things never get to this stage is to hire a debt collection agency early on in the process. A good debt collection service has specialist knowledge and expertise at their disposal and can often recover a debt when every attempt on your part has failed. Operating within the law, they can successfully recover debts in a majority of cases and can save you the time, expense and stress of having to go to court.

 

Professional Debt Recovery for you …contact

Debt Recovery Associates. Persuasive, Persistence, Professionalism

Town Office-View Park Towers ,10th Fl ,Utalii Lane /
L584-off UN Avenue, Gigiri.

P O Box 27859 00100 Nairobi, Kenya

Tel +254-20-221 1382/362

Cell: +254 721 636 404

Fax +254-20-2211386

Email; debtrecovery@dolphinsgroup.co.ke

http://www.dolphinsgroup.co.ke/debtrecovery/index.php

Dolphins Group

How to write an effective credit collection policy…

 

debt recovery services

It doesn’t matter how small or large your business is, it is always important to keep control of your debt collection and ensure that your cash flow is maintained. Without cash flow, your business can become quickly constrained and you will struggle to maintain daily operations not to mention inhibiting your business growth strategies.

That’s why it is important to have a proper credit collection policy established in the early stages of your business so that you never have to face the problems of decreased cash flow.

In order to make this task easier, let’s look at some of the elements of a good credit collection policy.

  • If your business is large enough to have its own credit collection department, the mission statement should include a definition of its purpose as well as its focus on long-range activities. Inevitably, this means that the purpose is to ensure cash flow is maintained within normal credit terms.
  • Irrespective of the size of your credit collection department, even if it is only one staff member, it’s important to have the goals of each phone call and letter clearly stated. It’s important to have key performance indicators that take into account the maximum number of days invoices are left outstanding before formal collection processes begin. The policy should also include checkpoints after which letters of demand and phone calls are made so that bad debt write-off percentages remain low. All these issues need to be specifically addressed in terms of how much debt exposure the business can stand.
  • Large businesses should structure the credit collection department in a manner similar to a bank whereby more experienced staff have the authority to commence legal proceedings, write off debts or to come to arrangements with individual debtors on a case-by-case basis. There should be no doubt as to the responsibilities of each staff member and clearly defined limits under which they are able to negotiate and make decisions.
  • The credit department should also have control over the valuation of credit applications and clearly defined terms under which credit risks are assumed. Once again, individual staff shall be allocated approval limits so that potential customers are assessed according to their risk.
  • One of the best ways to control debtors is to introduce incentives for early repayment of accounts and provide customers with a variety of means to settle their accounts, including direct deposits, credit cards as well as cheque or Internet transfer options.
  • A clear plan of action should be in place for every account which is overdue. Careful monitoring of these accounts becomes one of the most vital functions of any credit collection department because every dollar unpaid nibbles away at cash flow, which is vital to the existence of any business.

Although these points are not meant to be an exhaustive list, it provides a starting point for the writing of an effective credit collection policy and may a sufficient to avoid having to use the services of a debt recovery agency to keep debtors under control.

 

Professional Debt Recovery for you …contact

Debt Recovery Associates. Persuasive, Persistence, Professionalism

Town Office-View Park Towers ,10th Fl ,Utalii Lane /
L584-off UN Avenue, Gigiri.

P O Box 27859 00100 Nairobi, Kenya

Tel +254-20-221 1382/362

Cell: +254 721 636 404

Fax +254-20-2211386

Email; debtrecovery@dolphinsgroup.co.ke

http://www.dolphinsgroup.co.ke/debtrecovery/index.php

Dolphins Group

2 of the Best Ways of Collecting Debt …

 

Debt recovery associate nairobi kenya

Many businesses testify that, despite their very 2 of the Best Ways of Collecting Debt from non-paying or slow to pay clients, bad debts are a reality. When a business offers credit to its customers it is almost inevitable that some customers will allow their accounts to remain unpaid past their due date. However, businesses do not have to passively sit back and accept this; in contrast to ignoring the problem, a business needs to be proactive in chasing up the debt.

This may sound simple enough but many organisations are quite confused about how to set about collecting debt and the need to take action in a timely and thorough way. It is crucial to be prompt in responding to a customer’s failure to pay. Statistics show that a business is most likely to receive payment if the customer is immediately contacted after the due date for payment has passed.

If your business is serious about reducing and ideally eliminating bad debts, it is useful to know about the best ways of collecting debt.

 

1:  Using internal resources to seek settlement of debt

Some businesses choose to try to use internal resources to collect monies that it is owed. The best approach to use in this circumstance is to call the debtor and speak with them about the issue in a firm and polite manner. It is imperative that details of each phone call are recorded, including: the time, date and outcomes of the phone call. This information may be important to have later on.

Some businesses also have some success in sending a letter outlining the situation, demanding payment and specifying the actions that will be taken if payment is not finalised by a particular date. However, the greatest conversion rate from letters sent to debtors results when the letter is prepared and sent by a debt collection associates.

2:  Engage a debt recovery associates

Ultimately, the appointment of a specialist debt recovery service to follow up with debtors and chase payment on behalf of your business, is usually the most effective course of action and offers excellent value for money. Too often, businesses waste precious time and resources that they cannot actually spare on chasing up outstanding monies. Not only is this work not the best use of valuable resources, it is often ineffective as your workforce may not have the skills and/or time required to successfully chase up debts and finalise payment.

Most debt collection agencies do not require the organisations they contract with to pay until a debt is collected. Effectively, this means that the debt collection agency works industriously to recover and recoup debts and works innovatively to ensure that customers pay – if they do not pay, the agency is not paid.

Working with a debt collection service typically yields better results because the specialist service has the skills, knowledge and experience required as well as unique professional resources that assist it in its fundamental task of working with debtors to have them pay the monies they owe.

It is also quite often the case that funds are so hard to recover because debtors go ‘missing’. Of course, this poses a significant problem for individual businesses trying to recover funds but debt collection agencies are able to use all of their professional resources (including skip tracing services) to find debtors who are difficult to locate.

When you do work with a debt recovery service, you can feel confident that strategies will not be used to intimidate or bully your customers. Such an approach is no longer legal or acceptable. The benefit of using a debt collection agency is that they will exercise complete professionalism in the way that they go about recovering funds on your behalf.

Trying to collect debt is not always an easy or uncomplicated process. While some businesses do choose to collect debt in-house, those that experience more success work with debt recovery services and enjoy the professionalism and specialised resources of these services as they set about recouping the debts owed to your business.

Professional Debt Recovery for you …contact

Debt Recovery Associates. Persuasive, Persistence, Professionalism

Town Office-View Park Towers ,10th Fl ,Utalii Lane /
L584-off UN Avenue, Gigiri.

P O Box 27859 00100 Nairobi, Kenya

Tel +254-20-221 1382/362

Cell: +254 721 636 404

Fax +254-20-2211386

Email; debtrecovery@dolphinsgroup.co.ke

http://www.dolphinsgroup.co.ke/debtrecovery/index.php

Dolphins Group

5 Reasons Why Follow Up is Essential …

how to collect debts

 

In all areas of business, thorough follow up is essential. From establishing relationships with clients and pursuing new leads to nurturing partnerships and possibly chasing up outstanding debts, successful businesses follow up with their clients and engage with relevant partners, such as debt recovery services, on an ongoing basis.

So, why is follow up so critical to a business’ ultimate success? Here we take a look at five reasons.

1:  Relationships

No matter whether you are dealing with a new client or one that you have known for a longer time, following up is important for the existence of trust and an effective working relationship. Just as with other relationships, business relationships need work and your connection with customers needs to be consistent and attentive.

 

When an organisation is proactive in following up with its customers it communicates that it is sincere and committed to a positive long-term working relationship. Importantly too, when it comes time to pay bills, a client with whom you have been in close contact is more likely to pay in full and on time.

2: Establish your business’ credibility and position as an expert

It cannot be stressed enough that in order to attract and keep clients, your business needs to be recognised as credible and an expert in its field. Maintaining close contact and following up with customers achieves the ends of your business educating your customers and establishing the company as a credible, trustworthy leader. A business that does not follow up with customers and clients will rarely be perceived as valuing customer loyalty and striving for excellence in terms of customer service and the value of the services it provides.

3:  Remain at the forefront of your customers’ minds

Following up with customers is effective in keeping your business fresh in the minds of your clients and customers. This is important as when they do want to next make a purchase or commission a service, they are more likely to contact you. Similarly, they will also be far more likely to recommend you to people they know.

4:  Facilitate timely payment

Far too many businesses that offer credit arrangements for their customers soon find themselves at a financial disadvantage when customers do not finalise their bills with complete payment.

Close follow up with customers reduces the likelihood that your business and the money owed will be forgotten. Businesses that do not sufficiently follow up with their customers often delay their actions to chase payment and are ultimately far less likely to receive payment at all.

While close follow up will always be important, debt collection associates offer a wonderful service for businesses who need and/or want to take action to recover monies that are owed to them. Debt recovery services offer specialised expertise in chasing up debts and making arrangements for the recovery of outstanding funds. A great many businesses testify that, without the services of a debt collection agency, they had little hope of being paid for a number of goods and services provided on credit to particular customers.

5:  It is appreciated by many customers

It is very often the case that when a customer has made the commitment to purchase goods or a service from you, they intend to use your business for future purchases. By following up and being attentive to your customers, you will strengthen the faith of your customers in your business and strengthen their resolve to purchase from you in the future.

All businesses need to follow up with customers thoroughly and consistently. Follow up is generally appreciated by customers and will increase the likelihood of a customer completely finalising the payments owed to you.

Why Your Face to Face Debt Collection Works …

 

debt_recovery_associates_kenya

There are few things more perilous, frustrating and difficult for a business than its customers failing to pay for products and services that have been provided on credit. Particularly in difficult economic times, when cash flow is reduced and a business is subjected to an extensive range of financial pressures, trying to recoup funds from debtors that are reticent to pay is a stress and additional pressure that few businesses have the resources to address. For this reason, debt collection services can offer invaluable support and represent the best possible chance for your business to receive payment for the debts it is owed.

Debt collection agencies offer knowledge, skills, experiences and resources that are required to successfully negotiate the recovery of debt. The areas of specialty that are offered by professional collection agencies are rarely found within other organisations, and so internal efforts to try to recover debts are rarely as successful as the strategies and approaches used by dedicated and credible debt recovery services. Essentially, working with a debt collection agency can be the key to helping your company remain profitable for years to come, and the fee they charge will represent a great investment on the part of your organisation.

 

Specific debt collection services:

When you engage with a debt collection service, you can expect that they will tailor an approach to debt recovery that is appropriate for your organisation and the debts it is owed. Although the activities undertaken will depend on the debts and debtors you have, a debt collection agency will typically engage in some or all of the following activities:

Preparation and review of paperwork — Based on your records, the agency representative will understand the history of the account, the record of credit and promises that have been made and/or broken so that a good understanding of the debtor and situation is obtained before contact is made.

Make contact with your debtor — Debt collection specialists are experienced in identifying and facilitating contact with the appropriate person or people with responsibility for payment. This includes skip tracing and other location services. Very often, initial contact will be made via a telephone call and through an official letter, but in many cases this requires follow up in the form of face-to-face contact.

Face-to-face contact (Or Field Calls)– Face-to-face contact (or Field Calls) is often the strategy that delivers the best possible debt collection outcomes. Face-to-face interaction by an appropriately licensed and trained collector demonstrates that your organisation is serious about chasing and being paid for the services or products that it has provided. Contact of this nature does not have to be threatening or confrontational; to the contrary, the best outcomes can be achieved through professional, confident, respectful and straight communication. Particularly when facilitated through a third party — a debt collection agency — the message that your business is taking a serious approach is strongly communicated.  Information from field calls such can also be vital in determining whether or not to issue legal proceedings. They can also facilitate in the skip tracing process.

Unfortunately, letters and emails can be put aside and telephone calls can be avoided and therefore are limited in terms of their effectiveness in recouping debt. In contrast, field calls can suggest and deliver a more serious and committed message that shows your commitment to follow up and full and complete adherence to the terms and conditions agreed.

Professional intervention:

Sometimes a business is placed in a delicate situation when debtors with whom it has an important relationship fail to pay. Face-to-face contact conducted by a professional debt recovery service can therefore be the most effective possibility for avoiding legal action and recovering debt, as well as helping to preserve the relationship you have with your debtor.

Debt collection is not something that most businesses look forward to or enjoy. Because some businesses fail to pay their bills, debt collection field calls facilitated by licensed specialist debt recovery services typically represent the best possible chance for an organisation to receive the funds it is owed.

4 of the Best Ways to Get Payment from Your Debtors …

 

Debt recovery associates kenya

For businesses that extend credit to their customers, late payment or complete failure to pay is a reality. While there are many reasons why debtors do not pay, no business should willingly accept that these accounts should be written off without proactively implementing strategies to try to recoup funds.

Of course, debt recovery services can be of tremendous support in helping a business receive the money it is owed, but before such a service is accessed, businesses should utilise the following approaches:

1:  Develop clear contracts

Before you enter into an arrangement in which you offer credit, it is vital that your terms of payment and a contract for the work being done is put in place and clear. It is important to note that a contract can exist whenever your business agrees to carry out a service or supply goods for payment, regardless of whether the contract is in writing. However, it is often preferable to have documents in writing and officially signed.

What is absolutely imperative is that you discuss the terms and conditions of service and payment with your customer or client.

2:  Know who you are contracting with

This may sound simplistic and obvious, but knowing who you are entering into a contract with can be more complex than it initially seems.

As you develop a contract, you need to know and understand whether the business is a sole trader, a partnership or a company. You should then ensure that you record the correct name of the company or the business partners’ names, the ABN of the business and the correct address details for the principal place of business (this should be a street address rather than a PO Box address).

3:  Telephone calls and letters

Historically, telephone calls and letters have been the most often used strategies for businesses trying to recover outstanding debts, but phone calls, letters and now emails have proven to have limited effect in achieving this end.

Sometimes, your debtors genuinely forget to pay and a phone call, email message or letter can be all that it takes to spur them into action and for you to receive payment. A telephone call in particular can help to preserve a good relationship that may have been built with your customer or client.

It is also the case that some other businesses actively avoid payment of their bills and communication in the form of a telephone call, email or letter provides no impetus for them to fix up their debts. In this situation, a stronger course of action is usually required.

4:  Debt collection agencies

When a business has exhausted all approaches that are available to them and within their own resources, accessing the services of a debt collection agency offers the absolute best chance of debt recovery possible. It is also worth noting that a business does not have to try to recoup their debt through a variety of approaches before engaging a debt collection agency as so many businesses do not have the internal resources required to do this well or at all.

Debt collection agencies offer experience, skill and access to information not otherwise available to business owners generally. They provide a specialist service that operates within the parameters of the law to take action to have the monies owed paid to you.

In working to recover your outstanding funds, debt collection professionals employ relationship management skills so as not to destroy business relationships that may continue to be significant for your business. Rather, it is common for debt recovery services to be firm but fair in approach and communicate with debtors in a respectful manner.

No business likes to face and deal with the reality of bad debts. However, no business should be expected to absorb the financial losses that occur when a service or product is provided but payment is not received. Fortunately, there are actions that can be employed and strategies that can be used in order to have the best possible chance of receiving payment from your debtors.

 

 

5 Steps to a Healthy Cash Flow – Encouraging Prompt Payments …

 

debt recovery associates kenya

 

While it is difficult to imagine a business operating without offering credit to customers, maintaining a healthy cash flow is essential for a business to thrive. The availability of ready cash is crucial for ongoing commitments and further growth. Encouraging prompt payments from customers will ensure a timely turn around of cash within your debtors’ accounts and assist with the credit collection process.

Having a healthy cash flow means there will be a continuing growth in supplies which will in turn, generate further sales. It also provides sufficient moneys to ensure the payment of creditors. Maintaining the cycle by careful monitoring of your accounts is a positive step on the road to operating a successful business.

1. Screen Customers

Many debt recovery problems can be prevented by only offering credit to those customers with reliable credit history. Taking on a potential customer that you know to be in a high risk category is likely to result in disappointment. Debt collection agencies provide credit checks as part of their services. Spending a few dollars initially to screen customers could save many dollars in the long term.

2. Set Trading Terms

As part of the account application the trading terms need to be set out and clarified with the customer. Make sure they know what they are agreeing to so there is no doubt come the due date that the account is to be paid in full.

3. Invoice for Goods Received

If goods received equals a sale, then a sale requires an invoice. It is good practice to produce an invoice as part of the handing over of the goods. If you are providing a service consider progress payments for work done at agreed times.

4. Offer Payment Options

Long gone are those days of paying accounts by cheque, though there are still some people who insist running a cheque book is the only way to keep track of expenses. Giving your customers more than one option for payment makes it easy for them. Advise details of your bank account either on the invoice or in a separate letter, for internet payments.The more options available the better the chances of bills being paid on time.

5. Update Contact Information

Receiving unopened and returned invoices will leave you with a sinking feeling. What to do if the customer has skipped town or moved address without letting you know? Confirm you have the correct address on file every time a sale is processed or you may need to engage a professional collections agency to follow through with a skip trace across the nation.

Prevention is Best

Prevention is always better than a cure. Take care in the preparation and set up for any new credit account and be consistent with invoicing, sending out accounts and following up those slow payers. In no time the cycle will be in full swing and your cash flow maintained.