It’s inevitable that people will be running behind on their payments to you when you are their creditor. As a business, you know how the current global economy has been affecting people’s incomes the same way it’s been bugging your business operations. If possible, you don’t want to take legal action, but find a good system of business debt collection that motivates people indebted to you to pay up as soon as possible. This is where a good credit collection firm comes in to save your business from ruin.
A debt collection agency for businesses combines letters of demand, solicitors’ letters, SMS messages and telephone demands to increase the probability of debtors paying up. All these methods are performed within the rules of best practice. You’re assured that the agency doesn’t employ harassment or intimidation. The end result is always a positive outcome without negative consequences on your part and with the most minimal cost.
To give you an idea of the best practices that credit collection firms follow, here’s a short list of guidelines that the Australian Competition and Consumer Commission has published for businesses and credit collectors to follow when contacting a debtor:
- Creditors and collectors must provide a clear description and explanation of the debtor’s account.
- The letter, email, fax, or text message must clearly convey a demand for payment and its amount.
- The message must accurately explain the consequences of non-payment, including any legal remedies available to the collector or creditor, and any service restrictions that may apply in the case of utilities (for example, electricity).
- Allow the debtor to make arrangements for repayment of the debt by placing a phone number, email address, or an office address that they can contact or visit in person.
- Include a settlement proposal or an alternative payment arrangement to the debtor.
- After an agreed period, creditors and collectors must review existing arrangements with the debtor.
- During this review, creditors and debt collectors should find out why earlier attempts to contact the debtor have not been responded to within a reasonable period, if this is the case.
- Also, during this review with the debtor, creditors and collectors should find out why an agreed repayment arrangement has not been complied with, if this is the case.
- When there is a reasonable ground for suspicion, creditors and collectors may investigate whether the debtor has changed their residential address without informing them.
- Lastly, creditors and credit collectors should make an effort to find, inspect, or recover a security interest.
When a legal action is needed, the business debt collection firm has an in-house solicitor who is connected to a local court. Legal documents may be drawn up and delivered within 48 hours. In case you have debtors with credit that totals to under $10,000 dollars, then more than half of the legal costs are deferred until a result is achieved. This means that the financial risks normally associated with legal proceedings will be reduced to a level that leads to an affordable recovery of your outstanding receivables.