We see significant volumes of debt, even in good times. But now, debt seems to be rising and its getting tougher to collect. We have put together the 13 Steps to Recover Debts effectively. Follow these steps to successful recoveries! What are you seeing out there regarding debt/debt recovery in these times?

1. 1. HAVE A CONTRACT. MAKE SURE ALL
ENTITLEMENTS AND OBLIGATIONS ARE
CRYSTAL CLEAR.
2. MAKE SURE THE CONTRACT IS
PRESENTED, AGREED AND SIGNED BY THE
OTHER PARTY.
THE 13 STEPS
TO RECOVER DEBTS

2. 3. BE VERY CLEAR ON THE DUE DATE FOR THE
INVOICES. MAKE SURE THERE IS NO AMBIGUITY.
4. REMOVE ANY BARRIERS TO PAYMENT.
ARE YOU ABLE TO DIRECT DEBIT? CAN
YOU TAKE CREDIT CARD? CAN YOU GIVE A
LINK VIA ACCOUNTING SOFTWARE (LIKE
XERO) TO ‘PAY NOW’.

3. 5. IF APPROPRIATE TO YOUR
BUSINESS, AUTOMATE SOME OF THE
FOLLOW-UP EMAILS.
6. HAVE A VERY FIRM INTERNAL
COLLECTION POLICY AND TAKE THE
TIME TO DEFINE WHAT STEPS WILL BE
TAKEN AS THE DEBT AGES. REMEMBER,
THE OLDER THE DEBT, THE HARDER IT
IS TO COLLECT.

4. 7. REMEMBER COMMUNICATION IS KEY.
OFTEN, THE PERSON WITHIN YOUR
BUSINESS WITH THE CLIENT
RELATIONSHIP SHOULD BE THE PERSON
TO FOLLOW UP THE PAYMENT INITIALLY.
USE THIS AS AN OPPORTUNITY TO GET A
COMMITMENT AS TO WHEN YOU CAN
EXPECT PAYMENT.
8. DECIDE HOW LONG YOU WILL GIVE
THE DEBTOR TO PAY. 7 DAYS? 14 DAYS?
30 DAYS?

5. 9. STICK TO YOUR WORD. IF THERE HAS
NOT BEEN A PAYMENT WHEN DUE AND
PROMISED, FOLLOW UP AGAIN AND ASK
WHEN PAYMENT CAN BE EXPECTED.
10. REFER THE COLLECTION TO SOMEONE
OTHER THAN THE PERSON WITH THE
CLIENT RELATIONSHIP TO HANDLE
(EITHER INTERNALLY OR EXTERNALLY).
THIS DEMONSTRATES AN ESCALATION IN
SERIOUSNESS. IT IS ALSO EASIER FOR
SOMEONE WITHOUT THE RELATIONSHIP
TO HAVE THE ‘HARD’ DISCUSSION THAT IS
NECESSARY AT THIS POINT. THAT PERSON
WILL ALSO BE LESS LIKELY TO ACCEPT THE
MULTITUDE OF EXCUSES THAT ARE LIKELY
FLOWING AT THIS POINT.

6. 11. IF THEY STILL DON’T PAY,
COMMUNICATE WHAT YOU WILL DO NEXT.
THE PROMISE YOU MAKE SHOULD ALIGN
WITH THE COLLECTION POLICY YOU HAVE
DEFINED. FOR EXAMPLE, AFTER 30 OR 60
DAYS OVERDUE, YOUR POLICY MAY BE TO
REFER THE DEBT TO AN EXTERNAL
AGENCY FOR COLLECTION OR TO
COMMENCE LEGAL PROCEEDINGS. AT
THIS POINT, REMIND THEM THAT THEY
WILL BE LIABLE FOR ALL COLLECTION
COSTS AND INTEREST AS PER YOUR
TERMS OF TRADING AND THAT THIS WILL
SIGNIFICANTLY INCREASE THE COST TO
THEM.
12. AGAIN, STICK TO YOUR WORD. IF
THEY DON’T PAY. REFER IT TO
COLLECTION. OR INSTIGATE LEGAL
PROCEEDINGS YOURSELF.

7. 13. DON’T FAIL TO FOLLOW THROUGH ON ANY
PROMISE TO TAKE ACTION. THAT WILL ONLY
WATER DOWN WHAT YOU DO NEXT. IT WILL
GIVE THE DEBTOR COMFORT THAT THEY CAN
DELAY AND DEPRIORITISE THIS DEBT ( AS
DEBTORS USUALLY ARE JUGGLING NUMEROUS
DEBTS, NOT JUST ONE ).