A business must rely on more than just a handshake agreement to ensure that invoices are paid on time and bad debt is avoided. However, you’d be surprised how many companies are flying blind, operating without appropriate debt collection tools and templates that ensure payments are made and debts are repaid.
Ensuring a debt owed to your business is paid can be an incredibly frustrating process to undertake. Not only do you risk stalling your cash flow, but you must navigate the complexities of client or supplier relationships when trying to reclaim due funds. However, it need not be so complicated. Empower your business and ensure payments are made faster utilising debt collection tools offered by CreditorWatch.
FAQ: When and where to use debt collection tools
Healthy cash flow is critical for any business to meet operational costs, order more inventory and upscale. Bad debt owed to your business can easily derail these plans, which is why utilising debt collection tools might mean the difference between having a healthy business or an insolvent one. So, let’s explore everything you need to know about CreditorWatch’s debt collection tools.
What debt collection tools are available in CreditorWatch’s product suite?
A series of highly effective debt collection resources are available on your dashboard, all of which can assist in expediting debt recovery and reducing bad debt. The comprehensive suite of tools includes:
- Effective debt collection letter templates
- Analysis of your outstanding debtors and their credit risk to you
- Verification tools to identify and confirm ABNs of your customers
- A streamlined accounts receivable process, seamlessly integrating with Xero or MYOB
- The ability to register payment defaults to recover outstanding debts
The debt collection templates available in your dashboard are comprehensive, including debt collection notices, payment option letters, and debt collection letters of demand. You can also use our 30, 60 and 90-days-overdue branded templates to encourage your customers to pay.
Furthermore, you can attach a CreditorWatch membership logo to all your invoices and statements, which is a powerful way to indicate to clients, trading partners and suppliers that you have the support of a credit reporting agency behind your company.
When should I begin using CreditorWatch’s debt collection tools?
The best time to start analysing the risk indicators of new and existing customers is yesterday. The next best time is today.
When you monitor your debtors through the CreditorWatch platform, or run a company credit report on a new or existing entity, you can gain valuable insight into the risk indicators hiding in your data. Your personal appetite for risk, combined with the data now available to you, will help you determine when specific customers are becoming problematic.
Adverse payment behaviour, defaults or other actions, could be a sign that you need to commence using CreditorWatch’s debt collection templates to speed up the payment cycle. Further, if you’ve wasted countless hours chasing up debtors to manage the risk exposure of the business and reduce bad debt, only to still struggle with timely payments: now may be the time to seek assistance from a third-party.
What is the difference between just chasing payments and using CreditorWatch’s debt collection tools?
The biggest differences between chasing overdue payments in-house and utilising CreditorWatch’s debt collection tools are the heightened rate of success, the ability to maintain happy client relationships, and the high-level decision-making data the tools provide.
Improve payment success rate – CreditorWatch’s debt collection tools provide businesses with greater rates of payment success by leveraging our powerful third-party endorsement. Using our CreditorWatch logo on debt collection letters increases your chance of receiving payment by up to 53%. Smart business owners can increase their chances of receiving payment simply by utilising our easy, time-saving tools and debt collection templates.
Protect client relationships – One of the greatest challenges in following up on debtors is when those entities are key clients, partners or suppliers for the business. The last thing any business employee wants to do is damage a crucial relationship or risk a major contract being lost. Following up on outstanding payments is – to put it simply – awkward. This is where the professional communication offered in our debt collection templates can be beneficial.
Our branded welcome letters, payment option letters, and reminder notices not only showcase to debtors that you are associated with a reputable credit reporting agency, but can legitimise your business as highly competent, efficient and experienced. This helps to improve your chances of reducing bad debt and ensuring faster payments, while preserving the relationship.
Empower decision-making – These debt collection and credit reporting tools aren’t just available to you when you’re chasing up bad debt. By integrating seamlessly with Xero and MYOB, CreditorWatch can highlight any risky debtors to you directly in the dashboard, by analysing your database to pinpoint high risk entities ahead of time. The tools can also identify and verify customer ABNs, so you know more about trading partners and suppliers, including any instances of adverse cross-directorships. You can also use the comprehensive data provided by CreditorWatch’s analysis of your accounts receivables to make more empowered decisions around which clients to expedite payment from, or which new entities to avoid altogether.
What should I do if a customer still won’t pay?
Unfortunately, even after sending a debt collection letter of demand, some problem customers may still not pay what they owe your business. If your debt collection efforts are falling on deaf ears, you may need to escalate the situation by registering a payment default against the debtor. Thankfully, if you’re using our debt collection tools, you can easily do so through CreditorWatch’s Payment Default Registration service.
Once the payment default has been registered, it can adversely affect an entity’s credit history and score, making them more likely to pay off their debt to you. The potential for being labelled with a default can be a powerful motivator to encourage your debtors to pay you faster. Plus, it offers the added benefit of protecting other businesses from engaging with this difficult client.
This default will remain on the company’s credit report for up to five years, and is freely available to other CreditorWatch businesses who are analysing this customer’s risk profile. In fact, 91% of customers will not engage with a company with a default, which could have serious repercussions for the debtor’s future growth.
For more information on how our suite of debt collection tools could improve your client payment rates, or how to mitigate credit risk through existing entity assessments, please don’t hesitate to talk to our team of experts today.
Get started with CreditorWatch today
Take your credit management to the next level with a 14-day free trial.