Your Debt Recovery Experts

Don’t give up on unpaid debts – lodge a credit default

Some debtors are stubborn, to put it kindly, and simply refuse to pay their accounts.
So what should you do if you have unpaid debts and all your efforts are falling on deaf ears?

Unless they are disputing the debt, we recommend lodging a default on the debtor’s credit rating. Why? You want to ensure that your unpaid debts are not going unheeded and that there will be some pain and consequences for not paying.

The benefits of lodging a credit default include:

· knowing that a default will stay on the debtor’s credit file for five years.
· hurting their ability to gain credit with other suppliers and financiers.
· demonstrating to others that you have had an issue and raising a red flag for those who may be considering extending credit to them.
On a positive note, too, we see more payments being finalised once a default has been lodged.

What to expect

You may be thinking: Won’t that client dump us if we lodge a credit default? Yes, that is more than likely, but remember that you don’t need clients who don’t pay their bills. This is especially true if it is not an ongoing client and there is no relationship to salvage – it’s just about getting paid.
In the case of a longstanding client it is quite often possible for us to identify problems in advance and resolve issues around why they are not paying on time (or at all). Properly handled, this process can strengthen a potentially toxic relationship.
Once a credit default has been lodged, you will find that some debtors pay immediately in order for the default to be marked as paid, while others will contact you down the track when they need the default marked as paid. The latter typically happens when they are having trouble gaining credit elsewhere. Your debtor may approach you at any time in the five-year period following lodgement.

How it works

Certain conditions must be met before a credit default can be lodged and our debt recovery process ensures these are ticked before we lodge on your behalf.
The real message is simple – don’t close the file on unpaid debts. If you’ve had unpaid debts, before giving up ask us about lodging a default.
It is often a good way to prod tardy payers – and ensure that you get your money.

CHRISTMAS CASH FLOW TIPS

Christmas Cash Flow Tips

We’ve all read the posts on cash flow tips over Christmas, it’s when businesses shut down, it’s when you can’t get hold of anyone and it can be the most stressful time of year for business owners.

We’ve narrowed our tips down to three:

  • Chase your debtors early, and get a commitment of payment from them. For all those customers who are usually slow to pay, send them advance reminders of when payment is due.
  • Review when you will be invoicing leading into Christmas and consider when other businesses will be closing, so you are paid on time.
  • Review what you need to pay in January, against your current bank balance. What do you need to do between now and then to ensure you can meet your commitments?

Early work can save you stress over the holiday season, we hope you have a very merry Christmas and a safe and prosperous new year.