{"id":469,"date":"2017-03-03T10:02:43","date_gmt":"2017-03-02T23:02:43","guid":{"rendered":"https:\/\/marshallfreeman.com.au\/blog\/?p=469"},"modified":"2017-07-26T12:06:28","modified_gmt":"2017-07-26T02:06:28","slug":"what-can-debt-collectors-do-if-customers-dont-pay","status":"publish","type":"post","link":"https:\/\/www.marshallfreeman.com.au\/blog\/what-can-debt-collectors-do-if-customers-dont-pay\/","title":{"rendered":"What can debt collectors do if customers don\u2019t pay"},"content":{"rendered":"

What can debt collectors do if customers don\u2019t pay<\/h1>\n

If you\u2019re in business, chances are the bulk of your invoices are paid on time, or better still, ahead of time. Outstanding invoices, though, can well and truly bring your business down. They can open up a cash flow gap which can impede your business and demand attention and time that you simply don\u2019t have. Worse still, outstanding debts can threaten the survival of your business: the Australian Securities and Investment Commission cites poor cash flow as a factor in 40% of business failures<\/a><\/p>\n

Engaging professional debt collectors<\/a> can save you time, money and headaches \u2013 not to mention keep you out of that 40%. They can not only assist in the recovery of funds, but can help you set up the right systems and processes to improve your business\u2019s short and long term cash flow.<\/p>\n

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So, what can a debt collector do if a customer can\u2019t, or won\u2019t pay their invoice?<\/strong><\/p>\n

A professional debt collector can bring specialist experience and ethical expertise to collect your money. They have access to industry leading technology and bespoke debt collection techniques so they can recovery your debt as fast as possible.<\/p>\n

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Final Notice Letter. <\/strong><\/p>\n

When you acquire the services of a collection agency to manage your debt, the first action they generally take is issuing a \u201cFinal Notice Letter\u201d using company letterhead. This letter should be preceded by 1-2 friendly reminders from yourself either via email, letter, or both.<\/p>\n

If the \u201cFinal Notice Letter\u201d isn\u2019t successful in reconciling the debtors account, a formal \u2018Letter of Demand\u2019 is then issued. A Letter of Demand is drawn up by a solicitor and sent on the solicitor\u2019s letterhead, which generally evokes a response and your debt is paid in full.<\/p>\n

Tip: It\u2019s important that you are aware of all the fees and charges associated with using a solicitor, and to whom they should be attributed. Working with a debt collection company on your terms and conditions of trade document (used as a letter of engagement for any new clients) will ensure that the responsibility for these costs lie squarely with the debtor. <\/em><\/p>\n

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Follow Up<\/strong><\/p>\n

If no response is received from the Letter of Demand<\/a>, your debt collection company will continue to contact the customer in an effort to arrange immediate payment of the full amount without incurring legal action.<\/p>\n

If the debtor can\u2019t or won\u2019t pay the full amount immediately, you then have two (2) options.<\/p>\n

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  1. Negotiate a payment plan<\/li>\n
  2. Start legal proceedings.<\/li>\n<\/ol>\n

     <\/p>\n

    Negotiating Payment Plan<\/strong><\/p>\n

    Depending on the situation and to help preserve client relationships, an agency can negotiate a payment plan that works for you. Believing your customer is just experiencing some short-term cash flow problems and will be able to settle their debt, offering a suitable payment arrangement is an easy solution to resolving the matter.<\/p>\n

     <\/p>\n

    A payment plan could be;<\/p>\n