Calling all small business owners
Discussion
Now I'm sure I don't have to tell you that in this day 'n' age debt recovery is key to maintaining the liquidity of a small business. Thing is, it seems to be getting more and more difficult by the month.
Short but sweet query really......What techniques do you use with late payers, and which ones "bear the most fruit" so to speak?
All comments greatfully received.
Short but sweet query really......What techniques do you use with late payers, and which ones "bear the most fruit" so to speak?
All comments greatfully received.
Nerv knows his stuff about 'small business'
Excuse the stupidity....dags?1 month polite letter,
2 months, second polite letter with mention that if they are having difficulties we can accommodate various payment options if they’d like to call the accounts dept.
3 months, slightly stroppy letter reminding them that they’ve been given ample opportunity to pay.
4 months. Papers served.
2 months, second polite letter with mention that if they are having difficulties we can accommodate various payment options if they’d like to call the accounts dept.
3 months, slightly stroppy letter reminding them that they’ve been given ample opportunity to pay.
4 months. Papers served.
rude-boy said:
1 month polite letter,
2 months, second polite letter with mention that if they are having difficulties we can accommodate various payment options if they’d like to call the accounts dept.
3 months, slightly stroppy letter reminding them that they’ve been given ample opportunity to pay.
4 months. Papers served.
2 months, second polite letter with mention that if they are having difficulties we can accommodate various payment options if they’d like to call the accounts dept.
3 months, slightly stroppy letter reminding them that they’ve been given ample opportunity to pay.
4 months. Papers served.
Thing is.....In a high turnover, low profit natured business where Creditors are not to be messed with i.e. 30 day strict terms....4 months before issuing papers just aint quick enough.
sixpot said:
Now I'm sure I don't have to tell you that in this day 'n' age debt recovery is key to maintaining the liquidity of a small business. Thing is, it seems to be getting more and more difficult by the month.
Short but sweet query really......What techniques do you use with late payers, and which ones "bear the most fruit" so to speak?
All comments greatfully received.
Short but sweet query really......What techniques do you use with late payers, and which ones "bear the most fruit" so to speak?
All comments greatfully received.
A lot depends if you wish to continue doing busines with them.
I have used the mild suggesgion of a threat once, I got paid on the spot. I don't reccomend this though. I have used a debt collecting agency, went to court and got a decision but no money.
I now just go to see the person and break the ice by saying "is your business doing as badly as mine?"
If the person is not doing well there is no point in chasing him, try to get something though so the visit wasn't in vain.
If you think he has money(deadbeat type), just give it to a proffesional, 70% of something is better than 0% of the full amount!
How smal is small?
If 1 or 2 man band make them feel guilty that it is you personally that is going to suffer. If still no result, tell them that you underwrite you sales ledger by someone like RBS and that to keep within their terms you must inform them that as soon as the debt becomes 90 days OD you have given them permision to chase the debt on your behalf and that the incurred charges for the service becomes the liability of your customer. Pick a figure, I usually go for about £250 - £400. Very few small to middle companies want to incur the wrath of the big banks. I have found this to be very effective, although not quite sure what would happen if you still didnt get the money and they called your bluff.
Failing that I have heard baseball bats are quit effective
If 1 or 2 man band make them feel guilty that it is you personally that is going to suffer. If still no result, tell them that you underwrite you sales ledger by someone like RBS and that to keep within their terms you must inform them that as soon as the debt becomes 90 days OD you have given them permision to chase the debt on your behalf and that the incurred charges for the service becomes the liability of your customer. Pick a figure, I usually go for about £250 - £400. Very few small to middle companies want to incur the wrath of the big banks. I have found this to be very effective, although not quite sure what would happen if you still didnt get the money and they called your bluff.
Failing that I have heard baseball bats are quit effective
rude-boy said:
sixpot said:
rude-boy said:
1 month polite letter,
2 months, second polite letter with mention that if they are having difficulties we can accommodate various payment options if they’d like to call the accounts dept.
3 months, slightly stroppy letter reminding them that they’ve been given ample opportunity to pay.
4 months. Papers served.
2 months, second polite letter with mention that if they are having difficulties we can accommodate various payment options if they’d like to call the accounts dept.
3 months, slightly stroppy letter reminding them that they’ve been given ample opportunity to pay.
4 months. Papers served.
Thing is.....In a high turnover, low profit natured business where Creditors are not to be messed with i.e. 30 day strict terms....4 months before issuing papers just aint quick enough.
Well that works for use but in your case try the same aproach but with weeks instead of days. Point is with ours if they are taking 3months or more to pay we don't want their business again anyway. We're about to issue against a guy who's been taking the P well and truely. Very monied and from their job they should know all about interest and the difficulties bad debtors can cause to a business.
Then again i take the very flexible aproach and cut plenty of slack right up to the point where i'm sure they are taking the P and then hit them with the whole train set.
Thanks for all the comments so far.....Where you have little or no subbies (you are the subbie), and only two main creditors (key to your business) one for materials and one for plant. You are constantly funding the Employers projects. For sometimes upto 4 months. These are jobs that can be £6-10k for a few days works....as I said high turnover, low profit. You cannot afford to NOT pay your Creditos, so you have to pay up. There must be a quicker solution. The Problem is it's the construction industry and it's renound for poor payers.
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