Debt Collection Strategy In Australia

If you own a business these days more than likely you have a lot of past due and unpaid accounts receivable. If your business is a business-to-business company you may have as much as 40 percent of your accounts that are unpaid.

As a result, small businesses are seeking a debt collection strategy that is easy and effective. It can be very costly in terms of time to collect a debt. Simply sending out additional invoices in most cases does not work. This method usually results in just enough of a return to cover the cost of the additional mailings.

The hiring of a professional debt recovery companies is one of the best options to collect the debt.

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In many cases, a business will consider writing the debt off if the amount is less than $20 just because of the cost of debt recovery. However, this may be a poor debt collection strategy. Contacting the past account holder by phone is another option.

If you opt for this approach you need to be well prepared prior to make the first call. Many people have a short script to use when calling. It is important to note that using methods that result in an emotional response is the most effective. However, you should remain calm during your pitch to the client.

You can use the threat of stopping service, turning the account over to a collection agency, or notifying a credit reporting company to provide leverage or incentives for debt payment. The largest risk in making collection calls comes from the possible loss of the business account as a result of a verbal confrontation.

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