What all businesses should know about debt collection in Australia

What all businesses should know about debt collection in Australia

In an ideal world, everything stage within the invoice cycle would run smoothly. All customers would settle their payments on time, and everyone would be happy. However, the reality is far from this. While payment times have begun improving with technology and automated invoice systems, very few Australian businesses ever pay on time resulting in frustration, as this naturally impacts on the day-to-day cash flow of a business. 

While you might accept that as a business owner unpaid bills are a part of running a business, you can certainly deal with your unpaid debts in the right way, and most of the time this involves hiring a debt collection agency. 

There are firstly a few things you should know as a business owner about debt collection in Australia. Debt collection in Australia is governed by the Australian Consumer Law (ACL) and the ASIC act covering debt collection conduct is regulated by the Australian Securities and Investment Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC). These codes need to be understood and complied with by both individuals who are pursuing their own unpaid debts, and agencies who are collecting on behalf of a business.

You should also know that anyone collecting debt in Australia must identify themselves when contacting a debtor, you can make reasonable enquiries if the debtor states they are unable to pay, evidence of the debt should be presented if requested and always be professional about the consequences of non-payment or the legal status of debt. 

So, if you are a business who is trying to hunt down your debtors, you might think that it will be easier for you to attempt to collect the debt yourself. Sometimes this is true, but most of the time it isn’t.

Every business in Australia should know that the same ideas that stop a business from engaging a debt collection recalcitrant client, is the same reason why a debt collection agency will get the debts paid, when the accounts department can’t. And that is that debt recovery is a natural part of the arrear’s management process. 

If this sounds all too familiar to your business, and you have failed to recover a payment, the next step is to hand the debt over to a specialist debt collection agency. Handing your debt over is a smarter decision for the business as the cost of your debt is disproportionate to the revenue replacement to cover the cost of lost profit, such as out of pocket expenses and time, the costs of your team’s time in attempting to collect, costs of team morale for the difficult debt collection process. 

And by deferring to a debt collector at the earliest stage, the creditor is giving themselves a better opportunity to actually see your unpaid debts returned to your business. In fact, by working with the right debt collection agency, the costs associated with debt recovery commission can be offset and added to the debtor’s account. 

If you are searching for the right debt collection agency to take on your unpaid debts and tough debtors, then get in contact with eCollect. eCollect will do their very best in recovering your debts, and then if they believe that the situation needs to be escalated further, they can brief in their partnered team of lawyers to assist in the recovery. You will have the best chance of having your debts recovered and returned to you, when partnering with eCollect. 

 

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