We have all at one time or another found ourselves in a position where debtors owe us money, more often than not they settle the debt without issue.

Unfortunately some debtors will refuse to pay. However, all is not lost, below are a couple of ways to lessen the stress of non-paying clients.

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Bad Debt Prevention

Being proactive when issuing invoices can help reduce the risk of bad debts, when sending an invoice to a client make sure to confirm the location and person to whom the invoice needs to be given to.

 An invoice should contain no unnecessary information, it should be formatted in such a way that is clear and easy to understand, and most importantly you should check the invoice is accurate and in accordance with the agreed terms with the client.

There are many styles of invoices and you should ensure there is sufficient details included such as:

  • Your company contact details, any legal requirements like ABN and/or GST if you are GST registered and a contact person for any enquires.
  • It should also cover your terms of payments and due dates for payment, information on outstanding accounts along with payment options.  If you have agreed to a discount with the client, it is wise to mention these adding details of how the discount was worked out.
  • Add a clear description of the goods or services provided keeping to the details to the point. 

If for any reason you need to correct or adjust an invoice first contact the customer to advise them, you will need to explain what changes you are making and why.

Encouraging Payment from Debtors

New clients are essential to any business but offering credit when you have never done business with them before can be a risk and you should consider your options such as having a legal professional draw up a Terms of Trade contract or ask for a deposit prior to goods or service delivery.

Consider offering an early payment discount to debtors who pay on or before the due date, note clearly on quotes and invoices you reserve the right to charge a late payment fee.

Debtors Refusal to Pay

With all that said and done and you still have clients refusing to pay, it is at this point of the process where the services of a debt collector will be beneficial, debt collectors are able to dedicate time and resources to the recovery of the debt. 

Debt Collector

Recovery of debts by debt collectors in Queensland is regulated by The Office of Fair Trading and as such we are required to follow certain guide lines.

When you engage the services of a debt collector to act on your behalf you will be required to do so in writing and as a debt collector any money recovered on your behalf will be deposited into a trust account

Acting on your behalf to collect the outstanding debt, we are entitled to make reasonable attempts to contact the debtor for payment, as a guide or unless otherwise agreed, any contact as a debt collector should be limited to:

Three (3) phone calls or written correspondence per week maximum and any contact via the phone done between the hours of 7.30am – 9pm weekdays and 9am – 9pm during weekends.

Any contact in person should be conducted during the hours of 9am and 9pm weekdays and weekends, it is important to note that unless there is no alternative means to make contact or we have arranged with the debtor, visiting the debtor at home or similar location is not recommended practice.

Contact in person can hopefully be avoided if we are able to work out a repayment agreement over the phone or by written correspondence, it is part of our process to where ever possible to get all agreements in writing. 

During the process of debt collection, we are not at any time able to harass a debtor or threaten imprisonment – a person cannot be jailed in Queensland for unpaid civil debt.

We can after an appropriate amount of time in which reasonable attempts have been notify the debtor of the intent to seek legal action.

In most instances if the embracement of having a debt collector contacting them doesn’t encourage a debtor to pay threat of legal action is.

However if all attempts to recover the debt and the treat of legal action are not fruitful then the next option is to pursue legal advice from a specialised debt recovery lawyer.

CONTACT US TODAY TO COLLECT YOUR COMMERCIAL DEBT