Managing your Debt Collection
About the Author:
Richard Gee
Business Strategist at Geewiz
Richard is a mentor, business coach and small business specialist at solving problems, creating strategy and helping you make great decisions for your business.
In the current challenging situation, even good New Zealand companies are unable to pay their suppliers on time, and some suppliers have the wrong attitude towards debt collection and are losing good customers as a consequence.
It is important that you remember all aspects of your customer relationships and debtor control is a fundamental part of that. You need to work with your customers through the difficult times as well as the good times.
Sit down with your customers that are a bit slower to pay, if you can. Otherwise call them and find out what is happening within their business. See what you can do to assist; perhaps even park their overdue debt into a separate ledger so that they can then just chip away at it.
Also, focus on the issues involved in keeping your customers doing business with you. This will be a lot easier than having to go out and find new customers and run into a different set of issues and problems as you bed down with your new customers.
Customers can be broken down into 3 types:-
those who pay without any problems
those who can pay but will make you wait
those who can’t
It is your job to identify the category that applies to each of your debtors. If they are struggling, then work with them to get a realistic payment plan in place. If everybody in the economy works together to keep the wheels moving then we keep businesses operating.
Have a think about your debt collection procedures and make sure that your sales people are involved with your debt collection people to preserve your customer relationships.
Register your security interests on the Companies Office Personal Properties Security Register (PPSR) to improve your chances of recovering what's yours, should a customer default on the debt.
Remember, however, that today it is in everyone's best interests to resolve the debt problem and stay in business. Identify the issues and work out a solution that suits you both. Put it in writing, follow up and keep on top of it.
Business Strategist & Mentor
Geewiz
0800 GEEWIZ
www.geewiz.co.nz or watch videos on www.geewiztv.com
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