Owning your own business has many benefits but when you’re struggling to receive overdue payments from customers it becomes an annoying and very time consuming issue. Find out how to get your money back with a few straightforward steps.

Troubled Waters

Not every debt recovery issue is the same and people don’t pay you for specific reasons. It is important to recognise signs of troubled water as soon as possible so that the issue does not get out of hand and takes a lot of your precious time in chasing up payment. If a Debtor starts ignoring your invoices or uses the ‘cheque is in the mail’ excuse , then this is a pretty good indication that your debtor is struggling to make ends meet.

Agencies

There are several businesses which use automatic Debt Collection systems with their accounting packages, to assist with non payment collection. These systems are designed to flag debt collection agencies (like Baycorp) when the first indication of non payment occurs. This could be a 60 or 90 day plan, whereby the Debtor receives a notification of payment required, followed by further action if payment still fails to be met. Seeking professional advice can also be a good idea, with some lawyers being experts in debt recovery, like Rainey Collins in Wellington.

The Peoples Court

If you find that the debt has got out of hand, or the debtor has moved on to an unknown address so that you cannot contact them, then you have the right to take the issue to the Small Claims Disputes Tribunal, and often Debt Collection Services, like Baycorp will do this for you.

You will pay a small fee to take your case to the Tribunal, but if the Tribunal accepts that it has jurisdiction to hear your claim, it will send you and your debtor notice advising the time and date for the hearing.

No lawyers are present at the hearing because you present the case yourself to the Mediator and the debtor in turn has a right to defend their side of the case. You may take witnesses along to the hearing if required. It’s wise to back up your evidence with invoices, contracts and any other documentation which has been used in the correspondence between you and the Debtor.

If the size of the debt is justifiable enough and if the Mediator agrees in your favour, then they will give authorisation for the debt to be paid back to you. If the Debtor cannot pay in full, the debt is normally split into instalments over a lengthy period of time. Often, if the instalments cannot be made then bankruptcy procedures can be put in place.

Possession Is Nine Tenths Of The Law

If a Debtor gets behind in their payments to you, a repossession agent can step in take possession on items purchased on hire or loan, which will help with funds towards the debt. Most debt collecting agencies belong to the Associated Credit Bureaux NZ (ACB), so before hiring a debt collector ensure you have proof that the person or company is a member.

Alleviate The Risk

A smart idea to help ease the time consuming pain of debt recovery is to offer credit card payment plans to your customers, right from the beginning. You will pay a small fee to the bank for this, but it guarantees payment to you in the long run. It alleviates stress, risk and more importantly saves a great deal of time in dealing with debt recovery.




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