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  • Email: info@dsluk.net
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Category : Focus

Risk Management

Debt Prevention is the Best Cure

                                     Debt Prevention is the Best Cure

We live in a golden age of access to information, thanks to the internet you can find pretty-much anything you want to know using your computer, tablet, or smart phone. What’s really nice is the ability to find people that can help you achieve your goal.

Equipped with the answers to your debt problem, what does the average manager / owners do with the information?

In most cases they do the same as they did last month, last year and the year before that, hope the customer pops in and pays.

It happens because the average manager / owner believe the following reasons are somehow valid when it comes to collecting what’s owed to them.

  1. They seem nice, they will pay eventually
  2. I haven’t got time to chase customers, I’m too busy
  3. We don’t want to upset the customer
  4. They may move to another practice
  5. We phoned and sent letters, what more can we do?

The excuses detailed above are by no means complete, managers and owners tell themselves that engaging the services of a collection professional is too risky, too expensive, too time consuming and most of all to its uncomfortable to deal with. Somehow it seems easier to ask the bank to increase facilities rather than collect what’s owed to them.

What Can I Do? Answer – Introduce clear guidelines

One of your first jobs as a business owner should be to set in place a set of clear guidelines for the issue and recovery of invoices. All customers and staff should be made aware of the process of issuing and chasing invoices and this should be adhered to consistently – without fail. Don’t give second, third or fourth chances to customers – they’ll come to expect it and could end up taking advantage.

Writing your guidelines

When thinking about these rules, think carefully about your particular business. If you run a veterinary practice, for instance, you will have a number of different income streams – those who are regular customers, those who are emergencies and those who are ‘commercial’. As each type of customer arrives with entirely different sets of circumstances, each of these may be dealt with differently.

 Get your procedures right from the outset.

An example of your guidelines could be:

Emergency customers must pay in advance / at the time of treatment
• Regular on-going treatment may be completed under payment/credit terms
• All credit customers must undergo credit checks first
• All invoices must be paid within one month
• One reminder will be sent before further action is sought

Use a good T&C specialist solicitor

You should set up your terms and conditions with a specialist to ensure that they meet all the correct legal requirements. We are lucky to work with a firm who we recommend to our clients to ensure that your procedures are watertight – preventing any confusion or issues in the future. Contact dsl for further details. www.dsluk.net

Make everyone accountable

Charge one staff member with the job of looking after accounts and invoices. Having a clear person who can be the point of contact for all clients and customers is vital for giving your accounts department a “human face”. This makes it harder for there to be instances of any miscommunication or misunderstandings – as there is one person who has dealt with the entire procedure.
The ‘right’ person should be friendly and understanding, but also willing to be hard when called on to do so. If problems arise internally and you’ve followed your own procedures, there should be no issue with passing on debt to a collection agency – after all your customers know what is expected of them from the outset.

As you can see, the point we are trying to make is that everything should be laid out; clear for all to see and that it works for your business type. Hopefully this should mean fewer instances of unpaid bills.

Should you want to find out more about correct procedures or, to find out more on how we can help you, please feel free to contact us on 01527 543672 or via email mike.brooks@desluk.net

 

Find debt absconders with our new Track and Trace service

Locate a person or company using the Trace Enquiry Form

  • Simply complete the information form with as much information as you can give us and we will start our searches for you immediately. We have a dedicated tracing department working every day locating absconders.
  • Following a successful trace our seamless process allows the debt collection team to go on and obtain payment.
  • You can expect to receive your results in 7 – 14 days after submitting your form. All instructions are dealt with by a real person, not a computer and you can be assured of our commitment to customer service.
  • Costs for this service are fixed so you always know how much the service will cost.
  • Following receipt of your enquiry a member of the customer service team will contact you to discuss your options.

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The Late Payment Act can Off-Set your Debt Collection Costs

I am sure you have asked yourself the question…

“Why should I bear the cost of collecting what is in effect my own money?”

Well you may not have to by way of the Late Payment Act.

The Late Payment Act enables you to offset the cost of debt collection. This means when we are successful in collecting your debt the majority of the collection cost is born by the debtor.

Using this Act of Law helps to redress the balance with regard to the cost of chasing overdue commercial debts, we at Debt Solve will to help you by offsetting the appropriate cost of collection utilising the late payment charge and accrued interest – Interest is currently applied at 8% over base.

The team at Debt Solve will be happy to discuss how to integrate the benefits of The Late Payment Act with your credit control department.

For a no-obligation discussion please contact us through this form or call us now on 01527 543672

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For your information

The current regulations are known as: The Late Payment of Commercial Debts Regulations 2002 and came into force on 7th August 2002.

These regulations extend to England, Wales and Northern Ireland. Follow this link for a copy of The Late Payment Act 2002.