How To Get Free Debt Collection
If you’re like the vast majority of business owners what you hate most about referring your debts to a collection agency is the thought of them lining their pockets with your money.
You see, debt collectors generally charge 2 sets of fees: an up-front engagement fee to pursue a debt and a commission on every cent they recover. And while most debt collectors charge a commission of around 20% some of the more predatory firms will ping you with ludicrous commissions 40% or more!
However, with just a few scribbles with a pen you can avoid having to pay such fees forever more.
So what’s the magic cure?
Easy!
Just erect a notice visible to your customers that says:
“Unpaid Accounts Will Incur Late Payment Fees And Collection Costs”
The instant you put this notice up, from that point on for any new accounts you refer to a debt collection agency, all costs incurred to recover that money will be passed directly on to your debtor. Which is only fair as they’re the ones in the wrong. So it’s only reasonable that they’re the ones who get penalised. In this way you won’t be billed a cent on all money recovered.
As simple as this secret is, there are 3 important points to keep in mind…
1. The Wording Is Immutable.
Your notice must display the words “Unpaid Accounts Will Incur Late Payment Fees And Collection Costs” If you change this in any way chances are you’ll compromise your right to charge penalties and pass on collection costs. So stick with this phrase and you’ll be covered.
2. Location Is Critical.
If your clients can engage your services without actually stepping foot on your premises, displaying this wording only in your office will NOT give you the right to pass on collection costs. It’s critical that this wording can be seen by a client before they engage your services or purchase your goods.
A good example is a mechanic who tows a broken-down car back to the garage. If the wording isn’t displayed in a place where the owner of the car can see it before the mechanic actually tows the car away then you can not pass on collection costs should they default on payment. Whether they see the sign or not is irrelevant . What’s important is that this wording is displayed where it can be seen before any work is commenced.
Furthermore, if you write quotes or extend credit then the respective documentation must include this wording. Similarly, if you conduct business online then your website must also include this statement.
3. The Notice Does Not Give You Retrospective Power.
If your current Terms and Conditions of Trade do not bestow the right to pass on collection costs to your debtors, putting up this sign today will NOT miraculously empower you to pass on collection costs incurred to recover existing overdue accounts.
Now you might be tempted to think to yourself, “Who’ll know when I put up the sign? I’ll put it up today then send my existing bad debts to a collection agency and no one will be the wiser.” Now while you might get away with it, if you get caught you’ll be up for a $200,000.00 fine! My advice: put up the sign today and accept the fact that you can’t claim costs on your existing accounts.
Take Home Message: Protect what you work so hard to build. Display this notice where your customers can see it and know you won’t be fleeced ever again to recover what’s rightfully yours.
Publisher of the world’s only free online Debt Collection video training for business owners The Debt Doctor is a leading authority in accelerating and magnifying business cash-flows. To Recover Bad Bebts quickly and affordably — as well as prevent them from occurring in the first place — simply click either link above.
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Tagged with: bad debts • debt collection • debt recovery • home business • overdue accounts • small business • work from home
Filed under: work from home
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