Every client is different and consequently it is difficult to apply a set number of contacts that should be made before a debt is referred to a collections agency for further action. Rather than thinking about how many times a debtor has been contacted it is often useful to consider whether the process that has been used is effective.
An effective process is characterised by:
– The prompt issuance of invoices.
– Monitoring of accounts receivable to ensure that you are ready to chase accounts as soon as they become overdue.
– The gradual escalation of pressure on your debtors (this could include a polite reminder as a bill is nearing its due date).
If your process is efficient and effective and you have exhausted your options in trying to recoup the debt it may be time to call in the experts. A reputable debt collector can help you to collect your overdue accounts, leaving you to focus on other areas of your business. Don’t wait until your account is 120 days overdue to ask for help – the sooner you call the experts the sooner you get paid.
Got a question for one of our Experts? Choose one that suits your area of inquiry and send it in to asktheexperts@smartcompany.com.au
Christine Christian was appointed CEO of D&B Australia and New Zealand in 2001 after leading the management buy-out of these operations from D&B global company. In this role, Christine has more than doubled the market value of D&B. In 2007 Christine managed the competitive sale process of D&B Australasia from AMP Capital to Lazard Carnegie Wylie.
For more Cashflow Advice columns, click here.