Debt Collection

What you can do as a business to make debt collection less painful!!

If you wish to recover additional costs from your customers in the event they do not pay for goods and services you provided you must inform them of these additional costs when they agree to the supply of goods or services.

You could:

1. Display a notice clearly informing customers that they will be liable for collection fees and late payment
fees if they do not pay for your services by the agreed date;

2. Provide customers with a written explanation of you terms of trade when they order your goods or services. It should clearly explain that custmers will be liable for collection fees and late payment fees
if they don't pay within the specified time.

3. Have customers endorse cheques agreeing to be liable for collection costs should the cheque be dishonoured.

A statement on an account sent after the service or goods have been provided is not enough to enable you to demand these extra costs.
If you need any further advice on debt collections or the above statement please contact me. My advice is free.

Note:This information comes courtesey of the Commerce Commission and makes reference to your obligations under the Fair Trading Act.

On a not so serious note...............

Pay for you past bills

A customer sent an order to a distributor for a large amount of goods totaling a large amount of money.

The distributor noticed that the previous bill hadn't been paid. The collections manager left a voice mail for them saying,"We can't send your new order until you pay for the last one".

The next day the collections manager received a collect phone call from the customers saying, "Please cancel the order. We can't wait that long".