Running a business takes copious amounts of time and the last thing you want to be doing is chasing up debtors. Even with a proper credit check and credit score, debtors can sometimes slip through the cracks.
From 2016-2017 undisputed debts to the Australian Taxation Office increased by 77.6%. Even if you have a clear credit policy in place with your business, the risk associated with extending credit in any industry is rife. The businesses who have their accounts receivable processes in place are the ones who get paid on time.
No one wants to make those awkward calls to chase money. These can often lead to tense conversations or even the threat of court actions.
The key to debt management is finding ways to stay on top of your debtors to efficiently reduce the risk of bad debt. In this blog, we will delve into the ways in which you can streamline your debt management and collection processes.
The Painful Debt Collection Process
Requiring much patience and consistency, reclaiming what you’re owed through debt collection can be a tedious and painful process.
Chasing your customer for money can mean multiple phone calls, sometimes more than once a day. These “reminders” to collect what you are owed can result in frustrated wording and poor communication. These conversations can turn sour and many creditors can risk ruining long-standing or new relationships with their customers and clients.
Once reminders have been given time and time again, the threat of court action often comes next. There is no denying lawyers and court fees are expensive and the process is time consuming – sometimes taking years. Many creditors and businesses think court action is the only way to reclaim what is owed.
Before heading to court or calling debt collecting agencies, have you thought about a streamlined debt collection process? Accessible and affordable, you can simplify your debt collection with CreditorWatch’s debt management tools and software.
Simplify Debt Collection with CreditorWatch
Acting in a timely manner is key to retrieving your money from debtors. Changing the way you collect payments and address debts owed to you – DebtorLogic minimises the risk of bad debt and gives you the information to understand all risks involved.
DebtorLogic shows you how your customers are paying compared to the broader market. Poor payment behaviour is a strong indicator that a business is in financial difficulty and poses a high risk of a payment default, court action of even insolvency.
Through proactive debtor management, CreditorWatch’s DebtorLogic helps you to stay on top of your debtors. Providing a data-driven analysis of your Aged Trial Balance (ATB), DebtorLogic offers an interactive trade program to manage your debts. This innovative tool identifies your customer’s payment trends, determining their potential to pay through trends.
When you upload your ATB, you gain access to an innovative dashboard which helps you identify deteriorating payment behaviour from your clients or customers. This visual data helps you to track payment trends through comparative easy-to-read graphs and tables. You can break down data to reveal credit profiles and high risk behaviour with any winding up notices, cross directorships, ABN/ACN changes, mercantile enquiries and changes to credit scores.
Manage your credit terms with customers and clients and assess creditworthiness and payment behaviour through identifying high-risk debtors. With unique data sources from corporations and small businesses, from Xero and MYOB, you can see how you compare to others in your industry.
After you have determined your best and worst customers, you can manage expectations by prioritising your collections and adjusting payment terms. Reduce your Days Sales Outstanding (DSO) and improve the overall collection rate of your portfolio with CreditorWatch.
Avoid Legal Battles With CreditorWatch
When customers continue to ignore their debts, a payment default is added to the bad debt registry. This black mark is on credit reports and indicates that a business has poor financial health and has not paid their bills. 91 per cent of customers won’t work with any business that has a payment default. Even a warning will prompt bad debtors to pay their bills, as these defaults stay on a credit report for five years and affect the credit score of a business. It also generates an alert to the 50,000+ CreditorWatch customers. This innovative feature sets us apart from other commercial credit bureaus.
Avoiding the courts, sending out your own debt collection letter can speed up the collection process. With our tools, you can generate a variety of letters for every stage of the collections process. CreditorWatch’s debt collection letter templates include, welcome letters, accepted payment methods, payment overdue notices, final notices, letters of demand and 30, 60 and 90 day reminder notices.
CreditorWatch found that customers had a 53 per cent increased chance of receiving payment with a CW logo. This powerful third-party endorsement has proven results in speeding up late-paying debtors.
In a CreditorWatch case study, Ward Packaging had debtors who were refusing to pay their bills. Helen needed a proactive solution and sent out 33 letters in the first month of using CreditorWatch. 13 debtors ended up paying their bills in full or entered a payment arrangement, resulting in almost a 50 per cent increase in payments from just one letter.
Stay ahead of your debt with proactive debtor management which showcases the companies that are withholding payments or are experiencing cash flow problems. Ingenious in its intentions, DebtorLogic helps you understand any risk associated with your debtors.
Streamlining your internal processes, CreditorWatch debtor management solutions help you to keep your cash flow moving and your future predictions accurate. Helping you act in a timely manner our debt collection tools and templates expedite recovery. Get back the freedom and flexibility to run your business and contact us today.