Collectmore Pty Ltd

Are you guilty of this common mistake? Something we see so often is a debtor being given more chances than they deserve. As the saying goes, less is more. We were just sent a debt to collect for $9000. Invoice was 165 past due. Our client sent no less than 12 reminders, all around a month apart. Yes, 12. They encouraged us to share this story so as to help others who may be thinking the more reminders they send the more likely they are to be paid. Folks I am sorry to say but you won't be. Reminders become worthless after about the 5th one. Sending more than that actual lessens your chances of getting your money. What made it even worse for this client was they threatened debt collectors after the 5th one. But they never followed through and instead sent 7 more. Guys I cannot stress this point enough- 3 reminders followed by a Final Notice or Letter of Demand is ideal. 4 is too many and 5 is potentially kissing your money goodbye. And more importantly if you're going to threaten debt collection you absolutely MUST follow through with it. The next day. If you're not ready to then don't threaten it.
I really hope this helps guys. And for those wondering sure enough we collected the $9000 within the first 10 minutes. As expected the debtor had the money all along.

Cheers

Don't ever say this if you want to get paid.

We see a lot of emails sent to debtors by people wanting their money. Some are good, some are bad and others are downright awful. If drafted correctly, email is the single most powerful contact method available. But what lets down so many people is mixed messaging. Here's an example:

Dear Mr Debtor,

I hope you had a great weekend.

Unfortunately your invoice remains outstanding and you haven't paid as promised. I will now be sending it to our debt collectors unless it is paid today.

Many thanks,

Who can see the problem with this? The middle is great but the start and end are awful. All this debtor will remember is you thanking them for not paying and hoping they had a great weekend. If you want them to take your email seriously your message MUST be consistent. Remove all fluff and niceties. It's completely unnecessary. Save your kind words and politeness for sales emails, customer service or gentle reminders. Being too nice does not get you paid. Being firm and assertive does.

Cheers guys

"What is your ABN?"

If your customer is a business then I cannot, cannot, stress how important asking this question is. You simply MUST get their ABN number. If you don't then you're opening yourself up to a whole lot of unnecessary risk. If you're giving a business time to pay, AKA credit, then you must always be thinking worst case scenario, being- they don't pay. If you have their ABN then you can use it to find their correct business information. You can use it to establish the correct entity you're going after. And when it comes to listing a credit default or suing them, this stuff matters. In fact it more than matters- it's vital. So ask the question- "what is your ABN?". If they ask why tell them you need it for invoicing purposes. Simple. If they say they don't have one then they don't have a business. And they will be liable for paying you themselves. So many people, new business owners especially, are so excited about getting a new customer or a new sale that they become blinded. All judgment and common sense goes out the window and they avoid asking questions like this because they don't want to offend. But please, take it from us- asking for their ABN isn't an offensive question. In fact it actually enhances your reputation and makes you sound thorough and diligent. Professional and particular. Please take it from us.

Cheers guys

Discounting- just don't do it.

Almost every single week we get sent debts which are for two amounts- the original amount plus the discounted amount. When we ask why it's almost always because the client thought they were being nice. Generous. Accommodating. They thought it would incentivize the debtor to pay. And guess how often it actually does? Hardly ever. All discounting does is devalue your product or service. It's a sign of weakness which savvy debtors will absolutely seize upon. It's as if you're saying "just pay this lesser amount, I don't deserve the full amount". Not only this but once you offer a reduced amount, it's almost impossible to then revert back to the original amount. As soon as you amend the invoice, that's it. You cannot amend it back. Now this isn't to say you should never discount- but let them make the first offer. Don't ever be the one to start. And if you do discount, start small. 5%. And you should only do so as an absolute last resort. Back yourself and be confident that the product or service you provided is worth what you've charged.

Cheers guys

Want to get paid before 30th June? Here is what to do.

EOFY is in less than two weeks. If you're owed money then getting it paid before the 30th June is absolutely vital. Here are the benefits:

For you:

- Gets the debt off your books so you can start the new financial year fresh.
- You don't have to use your own money to pay the GST if you're registered.
- Makes your 30 June balance sheet look much better.
- Lets you begin the new financial year with more money in the bank.
- Makes your P & L much more accurate for accounting purposes.

For the debtor:

- Gets your debt off their books so they can start the new financial year fresh.
- Allows them to claim the GST if they're registered.
- Makes their 30 June balance sheet look more accurate

So they're the benefits but how do you make it happen? Easy. Make the 30th June D-Day. Create urgency using this day as the ultimate deadline. Come Monday 1st July all bets are off. No more mister nice guy. You must convey to them that you will escalate the debt on the 1st July if it's still outstanding. But don't just threaten it. You must follow through. Make Monday 1st July the day you stop allowing them to walk over you and dictate terms. All bad debts are avoidable. And if they reply saying they can't pay in full by the 30th June then ask our favourite question in the world:

"What's the absolute most you can pay?"

Anything is better than nothing at this time of the year. You don't want outstanding invoices falling over into the new financial year if you can help it. Hope this helps.

Cheers

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