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5 Things You Need to Know About Debt Collection

Whether you are a business owner who is sick of pursuing a debtor for a seemingly-ancient debt or if you simply have a friend who owes you money and you’re just about ready to write it off, you could benefit from the services of a debt collection agency.

But if you’re like many people, you’ve heard tales of threatening stand-over people who show up on doorsteps and impose threats.

We want to see more people getting money that is owed to them, and we don’t want to see people struggling with debt collection on their own. That’s why our business exists: to assist you with the safe, straightforward recovery of your debt.

We wanted to explain and touch on some things you may or may not know about debt collection in the hopes that it helps you to engage us for our services.

 

If you are grappling with an unpaid debt, then please call us on 1300 347 929 for a confidential and obligation-free chat about our services and find out how we can help you. We are here in Brisbane and Sydney to make debt collection simple, and we’d love to help recover what is owed to you. 

1. Debt collection and relationships

You may have the idea that using a debt collection agency will lose you customers/friends. Using a debt collector simply shows that you are professional, organised, and serious about recovering what is owed to you.

 

Of course, the type of collections agency you work with is important; at Strathmores we know the value of a client relationship, and we encourage our customers to maintain these relationships wherever possible. To that end, we use tried and tested strategies to get results and do not use ‘hard line’ tactics; preferring strategic and consistent contact to encourage payment.

 

And if nothing else, what kind of relationship are you looking to salvage where a client does not pay you to the point that you need to engage a debt collection agency?

2.  Debt collection is not all about hassling people

There is legislation in place that governs how a debt collector may approach a debtor. The legislation includes things like contact hours, amount of contact that can be made, and the form the contact can take. We do not, under any circumstances, go outside of these requirements because we value this legislation and understand that it is in place to prevent people from being hassled.

 

Of course, we do whatever needs to be done within this legislation to get results; whether that’s writing letters, making phone calls or making appropriate contact in whatever way we can to get results for you.

3.  Debt collectors do not profit from the misfortune of others

It is true that we do not get paid if we do not recover; but then again, neither do you. Debt collection is a service where we both benefit from a debtor making payment. But we do not chase people who are destitute or who have no capacity to make payment.

 

We take the time to identify reasons why people may not be able to make payment. We can offer extensions, and we can offer instalment options. We do not offer advice to customers who are having financial difficulty; our role is simply to work out a mutually beneficial payment option for your debtor to make payment.

4.  Debt collection is not expensive

Every collection agency is different, but most agencies will work on a commission structure. So, the payment received will likely depend on the amount collected in the first place. Remember though, you’re only considering a debt collection agency because you have been unsuccessful in collecting your debt in the first place. So while the debt collector will take a fee, this could be the difference between being paid in the first place and not being paid at all.

5.  Debt collection should not be seen as a last resort

So many of our customers come to us in frustration, where debts are unpaid for months, and cash flow is being interrupted. While debt collection is often a final thought, we know that getting involved in debt collection early on can be hugely positive.

 

A debt collection agency like us can offer you structured and tested solutions for debt recovery and can show professionalism and efficiency to your debtors. This can often have the effect of showing people you’re serious, which means it’s often less likely to happen again!

 

Ready to put your best foot forward? Contact Strathmores on 1300 347 929 to speak to our team today. We are here to help you recover debts and get back on track with your cash flow and business.

Three Least Effective Debt Collection Solutions 

When you’re looking to recover a debt and have been dealing with the process for a while, it may seem like you’ve tried everything to no avail. But in many cases, our clients come to us and tell us about what they have tried before working with us, and it’s often the case that the methods used to recover the debt were simply inefficient.

What we see is that no matter how thorough or committed you are to managing a debtor; if your methods are imprecise, you’re not going to get the results you’re after.

We want to take the time to cover three of the most ineffective and inefficient debt recovery strategies we know, and also to equip you with the knowledge you need to get debts back faster and with less stress.

Working with a debt collector like Strathmores is one of the most effective ways to recover debts. A debt collector is a way to outsource debt recovery and to free up your time to focus on more important things. Contact us on 1300 347 929 to get started with your debt collection today.

1. Texting clients with debt follow-up notices

The convenience of using a mobile phone means that we have access to everyone practically all the time. It also means that we are constantly being bombarded with messages and information which can be overwhelming.

Due to this, we often shut off certain messages and information – especially if this information is not positive or helpful. A debt collection text message is something that many people will ignore, particularly because a text message is often viewed as a ‘light’ method of communication.

We get texts from friends; so, when a company texts us to remind us of payment, we’re likely to treat it less seriously than, say, a legal letter from a debt collection agency.

2. Calling clients

How many of us answer phone calls when they come from an unidentified caller? Or when we know that the call is coming from a debt collection source? While phone calls can be an effective way of communicating a need for payment from some sources, for many people, a phone call reminding them of a debt is merely something to ignore.

We find that a combination of phone calls and letters is the best approach – but phone calls on their own are less successful at getting results. The bottom line is that no matter how many calls you make, people can always ignore them.

3. Not incorporating a system for following up

Chasing up a debt is not something that can be done with a random approach to contact. In order to be successful at getting payment from a debtor, you need to be concise, systematic and constant with your contact.

This includes being consistent with letters or phone calls that you make to your debtors. If you have multiple people or organisations that you’re chasing up, it is also vital to include a system of contact where you record what contact was made, when it was made, how it was made, and the overall outcome of the contact.

That way you can use this information to engage with your debtor further and ensure that the next time you reach out, you can use a method that has succeeded in the past.

We believe in incorporating a systematic approach to getting payment from debtors; whether you are owed $200, $2000 or more – the best and most effective way to recover payment form a debtor is by using a debt collection agency like Strathmores. We make it our business to recover payment that’s owed to you, and don’t get paid unless you are paid.

If we make the difference between recovering payment and not, then our service has been worthwhile. Call us today on 1300 347 929 to get started with your debt collection today.

Resources to help you manage your debts

Debt. It can keep you up at night and make you worry about how you’re going to ever repay it. When you’re a business owner who has to juggle all the stress of managing a business and your accounts, it can be overwhelming. That said, debt is an inevitable part of managing a business. Whether it’s a business loan, a company credit card, or an equipment loan – debt is something that can actually be very positive. Despite this, too much debt can be troublesome and downright problematic. We have created this guide to help you manage your debts and we hope it helps you get things back on track.

Want help recovering some long-lost debts? Contact Strathmores in Brisbane and Sydney today on 1300 347 929 to get assistance with getting your funds back from debtors.

Take an inventory/run reports with your account-keeping software

One of the first things you will need to do when looking to manage your debts is to figure out where you stand. You can perform an inventory check with your accounting software, or you can run reports which generate your overall performance within the business. With this information, you need to also run through all debts, committed funds, incoming invoices, outgoing expenses and any other financial matters to consider. From here you can make a whole-picture assessment of your business and work out how much you need to make to bridge the gap.

Consider raising your prices (but be smart about it)

It is possible to boost your sales through increased prices – but you need to be smart about it to ensure that you don’t scare off customers. Consider raising prices but offer greater value as you do so. You might like to offer a volume discount, for example, as a way to incentivise your customers to purchase higher amounts from you.

Use a debt collection agency to recover missing accounts and get the money back where it belongs: with you!

If you are waiting on outstanding invoices from customers, then consider working with a debt recovery agency like Strathmores. We turn unpaid invoices into money in your bank account. And we do it without compromising the existing relationship you have with that purchaser. When it comes to business debt it can be crippling – especially given that cashflow is such an important part of keeping your business going. Contact us to find out more about our tried and tested methods of debt collection for business in Brisbane and Sydney.

Refinance high-cost debt

Are you working with high-cost debt and struggling to manage? Think about refinancing your debts for a lower interest rate. You can even consolidate a bunch of high-cost loans into a single loan. This has the benefit of not only making repayments simple but means that you are not paying as much interest on your loan.

Cut your costs

You might be haemorrhaging money through office costs or with unnecessary purchases. We urge you to take a look at what kinds of things are costing you the most money (which you would have conveniently identified with your initial inventory) and then think about how you can reduce or eliminate them. Could you downsize to a smaller office? Could you go remote? Could you move into a co-working space? Think about splitting some costs with other service providers in your area or think about leasing equipment instead of purchasing. All of these things can put more money back into your accounts.

Want to know more about how we can help you with rounding up your business debts? Contact us online or call us now on 1300 347 929 to chat to one of our debt collection experts. We are here to provide support to your business when you need us the most. 

You’re Not Alone: Bad Business Debt Happens To The Best Of Us

Running a business is deeply rewarding, but it can also be endlessly complex, with ongoing challenges and opportunities arising when you least expect them. One of the best parts about running a business is working with passionate and committed people who are keen to see your ideas come to fruition. One of the worst parts about running a business is dealing with cash flow and managing clients who don’t pay!

While it is deeply frustrating (to say the least) if you wind up in a credit relationship where you’re not being paid, it’s often just through a series of unfortunate events that you end up on the bad side of a creditor/debtor relationship. That said, there are things you can do to mitigate this bad business debt, and there are ways to manage your debts and clients to ensure that your cash flow is no longer an issue.

We want to go through some of the ways that bad debt happens and then discuss some of the ways in which it’s possible to get out of this cycle.

Need assistance with unpaid debts? Strathmores are here to make short work of debts with our debt collection services. No fuss, and plenty of opportunity to preserve your business relationships – find out more by calling us today on 1300 347 929.

How Does Bad Business Debt Happen?

Usually very slowly. Unfortunately, it’s often the case that bad habits sneak in with your customers; you might allow a later payment on one invoice of a couple of days, and then over time, the customer will push the envelope and end up in arrears of a few weeks or even months. While they do pay eventually this kind of heel-dragging is just terrible for your forecasting and your cash flow.

You need to address a few key things within your business in order to ensure that you don’t get into bad business debt in the first place. Here are some of our top ideas for your business:

  1. Make sure that payment terms are incredibly clear and are built into every invoice that you send out.
  2. When new customers or clients come on board, include a short on-boarding meeting where you discuss payment terms and go through all of the options that your customers have for payment, including payment plans if applicable.
  3. Consider switching to a retainer-based model where customers pay an upfront fee.
  4. Offer incentives for clients paying early. You know how your power company gives you 15% off if you pay early? This is a carrot to get your dollars in their account sooner! Consider offering something similar to your clients with the understanding that money in your account is worth more than the additional 15% of the invoice.
  5. Follow up often and be gentle but firm! Often other business owners are busy and forget to pay invoices – it happens. This is where a gentle reminder can help. Depending on your invoicing system you should be able to automate this task which ceases upon payment.

Of course, while it’s great to take steps to prevent payments being an issue, there will sometimes be situations where you just can’t help the fact that customers don’t pay. In this case, it’s helpful for your sanity (and the preservation of your customer relationships) to work with a professional organisation.

This is where a company like Strathmores can help you, because not only does it take any personal feelings out of the situation, but you will also be working with experienced debt collection professionals. This means that we can operate swiftly and effectively to mitigate unpaid bills and deal with debtors on your behalf.

Advantages to Working With a Debt Collection Agency

When you work with a debt collection agency, you reap the benefits of professional experience. Along with that, there’s also:

  • Legal protection
  • Successful debt collection in short time frames
  • Documentation
  • Reputation management and client relationship management
  • Support
  • Save time and resources within your business

One of the biggest killers of business is cash-flow, and this can be caused by debts mounting. Don’t let this happen to you – work with Strathmores today and get your debts on track.

Call us on 1300 347 929 for a confidential discussion about your debts and how we can help.

5 Ways to Improve Your Business’s Debt Recovery Process and Avoid the Debt Chase

If you’re in business, we’re making a bet that you’ve probably experienced the runaround that takes place when you’re chasing up a debt. It’s not pleasant, but it’s something that every business owner has to face at some point.

Whether you’ve been chasing the same debt for a couple of months and are reaching the point of utter frustration, or if this is your first foray into debt collection and you’re wondering about the best way to proceed, we empathise.

If the statistics are to be believed, the small-medium Aussie business is owed on average of $13,200. Yikes. We don’t want you to even scratch a fraction of that amount owed to your business, so we have put together a helpful list of ways to avoid the debt chase altogether.

#1: Get a debt collections agency on side

Ok, so we’re blowing our own trumpet here, but we have a good reason to do so! Often debt collection can be a difficult and drawn out process, and many businesses experience the breakdown of what was previously a good working relationship due to money complications. As a result, that once good relationship is now ruined and there’s bad blood.

Well, when you work with a debt collections agency, there’s every chance that you won’t even get to the relationship breakdown stage – but if things do get difficult, we’re experts at preserving the relationship and making sure things stay kosher.

#2: Screen customers carefully

One of the easiest ways that you can avoid the problems faced when chasing debt is to not get involved with suppliers or businesses who are going to be trouble in the first place.

When you’re engaging in B2B transactions, we strongly urge every business to undertake a company search on the ASIC website and take a good look online to see if you can find any information about the company. If you find anything worth flagging, be sure to ask your potential new business contact about it, and if they’re genuine and worth working with, they’ll be able to explain or discuss the issue at hand.

#3: Offer incentives to your customers for early payment

Often customers won’t want to miss a payment deadline, but things just get in the way and payments fall behind. If you want to turn all of your customers into people who pay on time, then offer them a small discount or incentive to make their payment by the deadline. Power companies do this all the time – and you’ll make the payment before the due date just to save that extra couple of bucks.

Make sure you also think about incentivising early payments, whether that’s with something like a discount, access to a new product, or an extra product or service as a benefit for your prompt customers.

#4: Don’t be afraid to reach out to your customers

There is a lot to be said for the internet and what it has done for our ability to reach out to our customers online. That said, while it’s vastly simple to send an email, it’s important to actually take the time to talk to your customers too. You see, when you reach out to your customers and actually make a phone call to them – or even better, visit them in person – you’ll foster the relationship and essentially build that person-to-person contact.

When you know a customer/business owner personally, it makes it that much harder for them to be late on a payment! If you only know someone via the internet or emails, it’s easier to pretend they’re not a real person.

#5: Make it easy for customers to contact you and understand their debt

When you’re engaging in transactions with your customers, it’s important that you set explicit limits and deadlines for payment. You need to be very specific about what you want people to do, and when you want them to do it. Cloud invoicing software can help here, as can having a company like us on your side who can provide advice and guidance on managing your invoices and debtors.

And while we’ve given you these five tips, here’s another one for free: Make sure you’re always professional, polite and give people options whenever you can.

While it’s hugely frustrating being owed money, that should never stand in the way of you being polite and professional with your debtors. Offering people options is also a great way to make sure that you’re going to get paid – even if things do take some time to process. You should only ever turn to legal action as a very last resort, and don’t ever be afraid to say no to someone or to impose particular conditions like requesting 50% upfront payment, or something like that.

If you’re struggling with debt and need to clear the road ahead, be sure to call us at Strathmores. We are experts in managing debt and can help your business get back on track. Call us today on 1300 347 929.