Don’t let unpaid invoices haunt you this Halloween!
To ensure your business a treat of a Halloween, you’ve got to watch out for the tricksters!
The Skeletons
The most ordinary type of debtors is the ones that have been a prey of hardship. They want to honour their financial obligations but truthfully do not have the capacity and recourses to do it.
It might be the temporary reduction of income, unexpected expenditure, and sudden health problems. There are several strategies that can be employed with these types of debtors. Generally, empathetic approach, long term payment plans, and patience will do the trick when it comes to these debtors.
The Mummies
“I’m too wrapped up right now, but I’ll pay you first thing tomorrow!”… We all know ‘talkers’. These debtors always pay the minimum they are required to pay and need regular reminders to send in their payment. When they acquire a debt, they might aim to pay on time, but they get in trouble by making poor judgments.
Traditionally speaking, slow payers are habitually behind on primary payments and arranged payments. Since slow payers are still payers, moderate, frequent reminders to pay will often work before these debtors get too tied up.
The Ghosts
“Who…me?” ….Of course, they know it’s their debt, but will continue to dispute it. A true Halloween nightmare. These debtors are the biggest threat to your business. They will do anything and everything to avoid debt payments, despite full employment and minimal decline of assets.
These debtors are very well-informed when it comes to using credit and the collections strategies creditors might use. These debtors have no intention of paying what is owed. Right from the start, they are using a system to deceive the creditor.
There is no miraculous fix for every type of debtor out there. However, by gaining more insight about what category a debtor most likely falls into will certainly help you with developing your collections strategies and keeping the scary things away.
So how do you protect yourself all year-round?
Start with our treat here with a free no obligation debt recovery consultation.
1. Enchant your Terms
Make sure you place an emphasis on your payment terms and have them signed by all parties. This not only creates a legally binding agreement, it also sets clear expectations and obligations for all parties.
If the matter happens to spiral out of control, this can be a useful document to revert to.
It goes without saying that if you don’t set out your terms clearly, then you are leaving the debtors to decide when you will get paid. This will no doubt have a huge impact on your own cash flow and can quickly turn into a masquerade.
2. Use Wizardry Negotiation
From now on start viewing every single interaction you have with your debtor as a negotiation. This way, by the time the debtor will identify that you are using witchcraft, you will already have the advantage.
3. Make the call
Contacting your debtor over the phone on a regular basis is significantly more effective and economical than sending written debt collection communication.
Be confident when you are speaking with your debtor and be prepared for their responses by having a follow up process.
To understand when your overdue debts will be paid, ask them when you can expect payment and confirm the date and payment method before closing the call. This will hopefully confirm a commitment from the debtor and have verbal confirmation of when you can expect their account to be reconciled.
4. Dreadful Excuses
There is a good chance that your debtor will attempt to make excuses for not paying. How often have your debtors made you solve the ‘mysterious case of the unpaid invoice’ whilst giving you hair-raising excuses?
When this happens it is easy to allow your emotions and frustrations get the better of us. However it is important that you keep your emotions in check as it will allow you to think clearly and work out the best way for getting paid on time.
Regardless of how you truly feel about the person you are negotiating with make sure you treat the debtor as an equal, which will make them more likely to want to work with you.
5. Be Realistic
There is a good chance that your debtor plainly doesn’t have the means to make a payment. You have to be realistic about what you expect to get from them. You can’t squeeze blood out of a pumpkin!
6. Engage Specialist Debt Hunters
If all your options are exhausted and you are still being kept awake by the non paying trolls, then engaging professionals might be your best option. A Solicitor’s Letter can be the motivation the debtor requires to pay their outstanding debts.
And finally…
Debt recovery doesn’t need to be dark or dreadful, but it is a reality of business and it must be attended to promptly to ensure that you get paid swiftly. Using a solicitor led debt recovery provider will greatly improve your chances of recovery.
You should also consider a provider who is happy to offer a ‘no win no fee’ debt recovery service, so that you don’t end up paying for the collections service more that the debt is worth. Don’t be spooked by bad debts!
Discuss your debt recovery queries us on 0113 200 9720 or email the debt recovery team here.
