Debt Recovery Tips | Managing Debts | Avoiding Bad Debts
It can be tough for your business to balance customer relationships and the integrity of your brand, with chasing payment for your goods and services.
Here’s some tips from our team on avoiding and managing debt related issues.
Avoiding Bad Debts
- Do your homework before offering credit to a new customer. An online credit check or even a Google search can raise a red flag.
- Document agreements – have new customers sign a credit application which includes their ABN and ACN.
- You don’t have to give someone credit – don’t compromise your own business to avoid an awkward conversation.
- Send invoices promptly with accurate information, including purchase order details and convenient ways to make payments.
- If your customer has an overdue invoice, follow it up quickly and consistently. Establishing a reputation as a firm but fair business can avoid future issues.
- Keep the lines of communication open. You can take a firm stance on your debt and still remain professional, human and compassionate.
- If your customer asks for a payment extension, be specific about the terms and document it.
- Don’t be put off by an awkward conversation. Many of us don’t like confrontation or discussing money. If it’s too hard to manage, we can help.
- Weigh up the time being spent on chasing debts against the value of your time. Outsourcing may be the obvious answer.
- Keep it confidential. You don’t want your business developing a reputation as indiscreet.