Late payment is a big problem for many businesses. The longer the debt remains unpaid the higher the chance that it will never be recovered. You would not want to write off hundred of dollars as a bad debt now, would you? Find out how to handle a client who does not pay on time.
Why chase after a late payment?
Cash flow and liquidity are vital as you need the funds to take on new staff, increase inventories or invest in your business to meet your business growing demand. Thus, overdue accounts have a negative impact on your cash flow and will hurt your business’ ability to invest in your core operations.
Late collection in Australia
Late payment is a harsh reality for businesses that are providing credit to their clients. According to statistics, a typical Australian firm took an average of 54.1 days to settle their overdue accounts which is three weeks above the standard 30 day term. Meanwhile 27% of firms in the country are facing difficulty accessing credit. Either which, you would not want to be part of these statistics.
How to overcome this challenge?
The dilemma most account executives face is the difficulty of talking to clients about a late payment. Hence, it should be a skill you ought to learn to signal that you have a zero tolerance for poor paying behaviour.
How to demonstrate zero late payment approach to your clients?
Chase payment once a debt becomes overdue. If your credit terms are 30 days, then on the 31st issue a reminder that clearly states that the payment is already overdue. Entail the need or the urgency for them to pay in a polite manner of course. This action sends a clear message you have zero tolerance for late payments.
Late payment fees
Another way to reduce or eliminate late payments is to apply a late payment fee. If you opt for this be sure:
-The terms and conditions adhere to regulation that applies to the industry or business which your company operates
-The new terms are effectively communicated to existing customers.
-To make it less painful to your clients, you may want to give them a maximum of five days grace period before the late payment fee is applied.
But be warned. Going down this path may result in customer backlash. So you need to consider if you are prepared to lose some costumers. When making a decision, remember that a persistently delinquent payer can significantly drain your resources and that some clients are not worth having.
Expert advice and professional deb collector services
After 2 weeks of chasing a late payment, it is time to ask for an expert advice and professional debt collection services. These people have the skills, tools and the capacity to chase after your overdue payments and ensure your clients will never pay late again. Working with expert and reliable debt collectors can help you recoup funds essential for your business growth.
Some Benefits of hiring professional debt collectors:
-Reduce your late payment days
-Increase cash flows
-Reduce or eliminate financial stress on the business
-Support from highly skilled professionals
-Access to many collection service methods
Also partnering with a debt collection service agency can provide you cost-effective solution that works. Leaving you more time to concentrate on more enjoyable and rewarding areas of your business.
As a businessman, your bottom line is very important. As much as possible avoid writing bad debts and reduce your overdue accounts which can sometimes draw the line between survival and collapse. So as early as possible, recover late payments. In Australia, nobody can do it better than Mercantile Collection Services (MCS).
MCS has collected outstanding debts for their clients in excess of $21 million and they can do the same for you. Call them at 1300 018 410 or visit them at http://www.mercantilecollections.com/servicesdebtcollection/