Are you losing sleep over your debtors? by Natalie Walker


5 useful tips to help you get paid

Natalie Walker, Blitz Credit Management


 1                Know who you’re dealing with 
Before you extend credit to a new customer, identify the customer and type of entity you’re dealing with. A simple way is to perform an ABN lookupto determine if your customer is a sole trader, partnership, corporation or trust. Ensure you invoice the correct entity as this will make it easier to get paid. If you’re extending credit, you may wish to conduct a credit reference check on your customer to ensure they have not defaulted on payments elsewhere.
2                Effective credit documentation
Effective credit documentation is important. Ask your customer for the details that you need to make a decision on extending credit, including ABN, legal entity, directors, addresses and trade references. Ensure the terms are clear, set out each party’s obligations and protect you when things go wrong. Consider including a ‘cost recovery clause’ to cover your debt collection and legal costs if required.

 

3                Stay organised

Keep on top of your invoicing and debtors. One of the most common reasons for not getting paid is not sending invoices on time, sending them to the wrong addresses or not providing enough detail on the invoice. Set aside time each month to review your outstanding accounts and send statements or reminder notices.

 

4                Communicate with your debtors

Don’t be afraid to pick up the phone and talk to your debtors. Our experience shows that the most effective way to get paid is not demand letters or emails, but talking to your debtors in person or on the phone. Ask your customer politely, but firmly, for a fixed payment date or an arrangement to pay. Follow up with your debtors if payment is still not received on the due date.

 

5                Don’t leave it too long

The longer you wait the less chance you have of getting paid. If your debtors are still giving you excuses and not paying, send a final demand letter giving the debtor 7 days to make payment. Include copies of any outstanding invoices with the demand. If you don’t get paid, seek professional assistance from a debt collection agency. Often, involving a third party is all that it takes for you to get paid.

 


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Blitz Credit Management

Blitz Credit Management provides commercial and consumer debt collection and credit information services to businesses throughout Australia.  Blitz Credit Management stands out from its competitors because of its focus on service and investment in technology.

 

For more information, visit www.blitzcredit.com.au or call Natalie Walker, Managing Director, on (08) 6140 2584.

 


 

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