Super Charge Your Cash Flow | Product/service
Super Charge Your Cash Flow
Phone: +61 416 213 971
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25.01.2022 I learn a great deal about Credit Management and keep up to date with what is going on in the Industry through my membership with the Australian Institute of Credit Management ("AICM").
24.01.2022 Top Collection Tip#5: The Settlement Offer. A common mistake people make when offering to accept a lesser amount from a customer to settle a debt, is not setting a deadline and withdrawing the offer if the deadline is missed. If you offer your customer a lesser amount to settle their account (or they offer you a lesser amount) and you are willing to accept that offer, you must provide a deadline and withdraw the offer if they don't pay by the deadline. Example: "Dear Bill, I... am willing to accept your offer of $1,000.00 in full and final settlement of your account on the strict provision that payment of the entire reduced sum is received in full by close of business on dd/mm/yyyy. If the entire reduced sum is not received by the due date the offer is withdrawn and I reserve my right to pursue you for the whole balance." The reason you must include a deadline and statement withdrawing the offer, is if you don't and then decide to take legal action or engage a debt collection agency, the debtor has a legal right to say that you have accepted an offer to settle for $X, and by law you have to accept it. Why? Because you made it a non-conditional offer. You made a direct offer, a legally binding statement, only saying you would accept $X to settle. You didn't get a time frame and you didn't say that you would withdraw the offer if payment was not made by the deadline. So, get into the habit of setting deadlines and withdrawing offers if the deadline is missed. See more
22.01.2022 Top Collect Tip#10 - The Importance of Following Through - I've got a client at the moment who was very keen for us to chase one of his debtors. We engaged our collection process and we were successful in collecting about 1/3 of the debt. However, the debtor is now avoiding our contact. What do you do in those circumstances? You must follow through and escalate. After our initial process is complete it is really important that either a VCAT Application is filed or a legal act...ion (summons) is issued. In this particular case the VCAT Filing Fee is $302.50, and this amount gets added to the debt. The debt is $3,500.00. As the debtor has already paid some money towards the debt and cited financial issues as the reason for not being able to pay in full, I'm certain that they won't want to go to VCAT as they won't want an order against them. We know how to convert a VCAT Order to a Magistrates Court Order, so going to VCAT can get you your court order at a fraction of the cost. If you had to spend $302.50 to collect your $3,500.00 plus get your $302.50 back, wouldn't you do it? To me it's a no brainer. See more
20.01.2022 Top Collection Tip#7: Early Discount Incentive. When was the last time you reviewed your prices? Do yourself a favour and shop around to see what you competitors are charging per hour or for the products you are selling. If you review your pricing and you are lower than your competitors then happy days because it is time to put your prices up. I would recommend increase your prices by 10% AND offer a 5% discount to your customers for paying on time. You will be making a net gain of 5% on your annual revenue, and you will be improving your cash flow because many people are attracted to paying early if they receive a discount. If you are interested in learning more, register Here to watch my Free Video "3 Must Knows to Super Charge Your Cash Flow" http://superchargeyourcashflow.com.au/register-free/
20.01.2022 Donna Smith author of Super Charge Your Cash Flow (Short Term Training Program) and The Collections Guru
20.01.2022 Top Collection Tip#8. Know Your Customer. Did you know that a simple ASIC Free Search can save you a lot of heartache when your customer doesn't pay and you want your debt collector or law firm to take action? Here is the link to perform a free search https://connectonline.asic.gov.au//l/SearchRegisters.jspx - I had a client this week ask us to chase a debtor of theirs. The provided the company name to us but it didn't' exist. Make sure that you check the bone fides of your customer BEFORE you do work for them, because if they are giving you false or misleading information before you start your business relationship, that speaks volumes about their character and integrity and could imply they don't have good intentions towards payment of your account.
20.01.2022 Top Collection Tip#3: Be Brave. Having conversations with customers who haven't paid can be hard sometimes. Be brave. As long as your company/business has delivered exactly what the customer asked for and the terms of your engagement was clear from the outset then there should be absolutely no reason why you customer can't make an effort to pay. Sometimes we connect our self worth to money which can make it hard to ask for money. Getting better at this takes practice. So, if ...you tell yourself before the call "We did a good job, we deserve to be paid" it can help with your confidence in making the call. If this is a big issue for you I recommend that you stick a post it note or sign somewhere next to your Phone saying "We did a good job, we deserve to be paid" to remind yourself that it is perfectly OK to call people and ask them for money. After all, if you don't ask you won't get. See more
18.01.2022 Top Collection Tip#4: Always Be Clear in your Communication - Leave nothing to Interpretation. Just because you know what you mean, doesn't mean that the other person you are collecting from knows what you mean. And you may think you know what the they mean but do you know for certain? We make assumptions and fill in the blanks every day of our lives, human beings are programmed to do so. However, doing that when you are collecting money is not helpful. A debtor says "I'll pa...y you something this week". What does that mean exactly? If you have to guess the answer or make assumptions or fill in the blanks then don't! If anything is left to question then you need to ask more questions. "How much are you paying?" "What day exactly are you paying?" and "How are you paying?". If the bill is $10,000.00 and they are only paying $2,000.00 this Friday, then the next question is "When are you paying the balance?". Make sure your agreements are clear. There is a collection method I teach in my program Super Charge Your Cash Flow http://superchargeyourcashflow.com.au/program/ which will help you get better results from your agreements. See more
17.01.2022 Top Collection Tip#6: Making Payment Arrangements. Clarity is King! Use my ARCA method when making payment arrangements with your customers. ARCA = Arrange, Repeat, Confirm and Affirm. Discuss the arrangement, repeat what was agreed, confirm again (verbally) what was agreed and affirm the arrangement in writing via email. If you follow this simple rule you will have far less of your arrangements being broken because nothing is left to chance or confusion. In my training program superchargeyourcashflow.com.au/program you can learn how to master the ARCA method.
17.01.2022 Top Collection Tip#2: Black and White. If you have a customer who has promised you a number of times to pay but has not a really great question to pose to them is "What are your intentions towards the account?" Because the answer is black and white. Either they intend to pay or they don't intend to pay. When you pose that question to a customer and they say "My intention is to pay" (provided you make good notes of the call) that is evidence against them. That is evidence of their acceptance of liability for the account. If you have backed that up with Collection Tip#1 (confirmed they received the goods/services and the invoice), should they later raise some frivolous dispute to buy themselves more time, you will have all the evidence you need to take further action.
17.01.2022 Top Collection Tip#13: Accountability... How accountable do you make your customers? When someone says "I'll pay you next week" what do you say? Do you ask what that means? Do you say "how much are you paying?". Do you say "What specific day next week will you be paying and are you paying the full amount of $X?" Nailing down the details is really important when it comes to collections. And then timely follow up when the promise of money is broken is essential. Did you know there is a direct relationship between the time it takes you to follow up a broken arrangement and the time it takes your customer to pay? If you don't follow up in a timely manner the customer secretly thinks you don't care when you get paid. Not the message you want to be sending.
12.01.2022 Top Collection Tip#12: The Art of Escalation... Many small businesses allow tardy customers to drag out paying their account too long, and don't understand the importance of having an escalation process. If you don't have an escalation process, after a while, any threat of taking action loses its power. There is a direct relationship between the time it takes you to escalate and the likelihood of your customer paying, when you delay escalation. Your escalation process should include language that escalates too. In my online training program www.superchargeyourcashflow.com.au I can teach you all about the right process and language to use, to increase your chances of getting your account paid.
12.01.2022 Top Collection Tip#11: The Final Demand. When your debtor has promised and promised to pay and hasn't delivered you need an escalation process. The first step in that process is the Final Demand. A carefully worded final demand letter informs your debtor that you've had enough and that it will be referred to your debt collectors if they don't engage. Make the letter clear that it is a final demand. Put that in bold type after the Dear Sir/Madam... part. i.e. RE: Overdue Accou...nt - FINAL NOTICE. Then clearly display the amount owing. Tell them you have supplied a quality product (or service) and that you have been more than patient and reasonable. Give them 7 days to either pay the account in full or provide part payment with their written payment arrangement offer. Let them know if they fail to do that you are left no alternative but to refer the matter to your debt collectors with the view to issuing legal proceedings. And ALWAYS follow through. If you threaten to send it to you debt collectors then make sure you send it, because there is nothing less impactful than an empty threat. I run a debt collection agency called Reliance Recoveries https://www.facebook.com/relrec/ which is No Collect-No Commission. If you would like to refer a debt contact us via our Facebook page or the website www.relrec.com.au See more
09.01.2022 Top Collection Tip#9 - ABN's (Australian Business Numbers). Did you know that ABN's are Tax Identifiers not business identifiers? Many people are not aware of this fact. With the introduction of GST on 1 July 2000, the Australian Government introduced ABN's to assist the Australian Tax Office ("ATO") to identify businesses who would collect, pay and report GST. The ATO is the only body that is fully aware of the business structure associated with an ABN. So, if the ABN belon...gs to a Trust you cannot rely on the ABN to identify who or what legal entity is responsible for paying your account. If the ABN belongs to a trust you need to get more information from your customer. And the best time to gather that information is BEFORE you start doing business with them. You need to ask "Is the trustee of the trust 1) a company, 2) a sole trader or 3) a partnership?" In simple terms who or what legal entity is going to be responsible for paying the account? Ask them are you a sole trader? Example: Is it Joe Bloggs Trading As ...? Or are you a partnership? Example: Joe & Mary Bloggs Trading As ...? Or are you a company? Example J & M Company Pty Ltd Trading As ...? There is a free website where you can check your customer's ABN https://abr.business.gov.au/AdvancedSearch.aspx. Be mindful and do you due diligence!! Better to check and get your customer information right before things go pear shaped.
07.01.2022 Top Collection Tip#14 - How to Collect Debt during the Covid-19 pandemic - Many are wondering how to collect money right now because of the Coronavirus, and to be honest, it isn't much different to the way that you would go about collecting money. The primary difference is that right now you should be having telephone conversations with your customers about how the pandemic is affecting them. This is paramount. You must remember that most people want to do the right thing and... pay off their debts, and therefore if they have the capacity to pay they will make the effort to pay. Right now it is about being patient and understanding and getting people onto payment arrangements. I'm saying to debtors right now that it is important that they pay what they can now so that they don't get swamped with tonnes of debt in a few months time. I'm telling them to pay what they can to avoid financial stress down the track, because it is horrible to feel overwhelmed by mounting debt with no vision of any clear path through. When leaving telephone messages, tell them you want to chat about how the pandemic is affecting them and how you can work together through this difficult time and find a solution that works for everyone. The economy will recover and out the other side you will be able to play more hard ball, but for now patience is the virtue that you need to practice. See more
05.01.2022 Attended the AICM annual conference in Canberra this week. Some interesting changes in Insolvency legislation. Financial Hardship becoming a problem that businesses supplying credit to consumers, sole traders, partnerships, or guarantors need to be mindful of.
01.01.2022 Top Collection Tip#1 - Exploit the Call. When making payment arrangements, and you have your customer on the phone take advantage of that situation. Get as much information as you can from your customer. Confirm that they received the invoice, confirm that they received the goods/services and that there is no problem with the goods/services. This helps eliminate disputes later. And nail down the payment arrangement. There is a collection method I cover in my training program called "ARCA" which stands for Arrange, Repeat, Confirm, Affirm . It is a sure fired way to reduce the number of broken payment arrangements. You will find my training program here http://www.superchargeyourcashflow.com.au/program
