Home – New Forums Money matters Bad debts, finding a better way to avoid them

  • This topic is empty.
Viewing 15 posts - 1 through 15 (of 22 total)
  • Author
    Posts
  • #969711
    I hate My PC
    Member
    • Total posts: 31
    Up
    0
    ::

    Recently, despite vigorously pursuing them, a few of clients have left me with bad debts.

    I’ve been assured it happens to everyone but that doesn’t make me feel much better. I still feel like I’ve failed somehow.

    What I have learnt is that some people are serial bad-debtors. They live in the nowhere land of debts too small to pursue through Fair Trading, the courts and other such entities. Sometimes they are too small to pursue with debt collectors (which means they never get registered with applicable authorities and credit agencies).

    These people surf the edge of the law and small businesses ability to hold them accountable.

    To me it seems the best answer is to avoid them rather than chase them.

    At present I don’t know of a way to identify these people and businesses before I work with them.

    Can anyone point me in the direction of such a system or service?

    Thanks

    #1040193
    Burgo
    Participant
    • Total posts: 2,104
    Up
    0
    ::

    I think there is a credit register, where you can look up a customer or report a customer.

    I would try Fair Trading in your state.

    #1040194
    yourvirtualboard
    Member
    • Total posts: 569
    Up
    0
    ::

    Difficult to avoid as all sorts of circumstances can cause non payment, but I guess you’re referring to those that have very little intention of paying in the first place – Depending on values I guess but you could start with credit applications for bigger values, that way prospective new clients would have to provide references which you could then check. I also rely on gut feel when dealing with new clients and if I believe there could be an issue I walk away before I do any work because a sale is only a sale once the money is in the bank and if I don’t feel that’s on the cards walking away avoids the heartache from the beginning.

    Again depending on values, there are companies that specialise in credit control and I could pass on the details of one that has worked very well for one of my clients.

    #1040195
    Jake@EmroyPrint
    Member
    • Total posts: 1,117
    Up
    0
    ::

    Hello unamed,

    I’m not sure to what extent you’ve gone to chase these debts, or how many different ideas you’ve tried.

    I had a few clients who I thought were similar – Had no intention of paying and fobbed off each request I made.

    I changed my tactic and approached them on a personal level as opposed to a business one – Speaking business owner to business owner and explaining the effect their late payments are having on my operations.

    Both have now paid – (One 45 days, one 60 days).

    Have you tried any new tactics?

    – Jake

    #1040196
    Anonymous
    Guest
    • Total posts: 11,464
    Up
    0
    ::

    Hi David,

    A colleague and I both got stung by one of those people that never had any intention to pay a while back. The whole thing may still end up going through the small claims court, so I won’t go into the details here.

    However, one thing we learned after the event was that a simple Google search would have given us enough information to know that we didn’t want to have anything to do with him.

    I’ll be very interested to learn what solution you come up with.

    Cheers,
    Jayne

    #1040197
    DebtCollector
    Member
    • Total posts: 40
    Up
    0
    ::

    Hi,

    You can do credit searches through Dunn & Bradstreet or Veda Advantage online all for about $40.00 (I think) these searches will show any credit defaults, or registered magistrate/tribunal judgements against them. These things are not fool proof though as there are people who slip through the cracks and are not registered on these credit reporting agencies.

    Unfortunately when ever you give credit, some people will take advantage of you.

    If you need some free advise give me a ring on the number below.

    #1040198
    I hate My PC
    Member
    • Total posts: 31
    Up
    0
    ::

    Thanks BURGO,
    The sorts of people I’d like to avoid are the ones canny enough to stay off these thigns.
    They spend small amounts unlikely to be pursued and know the privacy loopholes to keep off the credit registries.

    Burgo, post: 48761 wrote:
    I think there is a credit register, where you can look up a customer or report a customer.

    I would try Fair Trading in your state.

    #1040199
    I hate My PC
    Member
    • Total posts: 31
    Up
    0
    ::

    Thanks Brett,
    As nI work through this I may give you a call.
    Thanks for the offer.

    I am indeed looking to plug the hole the slippery ones get through.
    (See my reply to BURGO in this topic).

    Thanks again.

    David

    DebtCollector, post: 48842 wrote:
    Hi,

    You can do credit searches through Dunn & Bradstreet or Veda Advantage online all for about $40.00 (I think) these searches will show any credit defaults, or registered magistrate/tribunal judgements against them. These things are not fool proof though as there are people who slip through the cracks and are not registered on these credit reporting agencies.

    Unfortunately when ever you give credit, some people will take advantage of you.

    If you need some free advise give me a ring on the number below.

    #1040200
    I hate My PC
    Member
    • Total posts: 31
    Up
    0
    ::

    Thanks Harry,
    You are right, it is the type you mention I want to avoid.
    Quite often my gut feeling is overwhelmed by a desire to “fix the computer” as it were.
    My problem is that later my gut feeling is proven correct.
    I need something more procedural or systematic to remove the gut from it at the moment when other factors are clouding it…if you get my drift.

    Thanks again Harry :-)

    yourvirtualboard, post: 48771 wrote:
    Difficult to avoid as all sorts of circumstances can cause non payment, but I guess you’re referring to those that have very little intention of paying in the first place – Depending on values I guess but you could start with credit applications for bigger values, that way prospective new clients would have to provide references which you could then check. I also rely on gut feel when dealing with new clients and if I believe there could be an issue I walk away before I do any work because a sale is only a sale once the money is in the bank and if I don’t feel that’s on the cards walking away avoids the heartache from the beginning.

    Again depending on values, there are companies that specialise in credit control and I could pass on the details of one that has worked very well for one of my clients.

    #1040201
    I hate My PC
    Member
    • Total posts: 31
    Up
    0
    ::

    Hi Jayne,
    That is a great idea…the Google search…can’t believe I didn’t think of it :-)
    What questions/searches did you ask/do of Google?

    I suppose I was hoping to come at the problem from a less onerous direction.
    Google searches can be ambiguous and depending on your wording (of the search question) you can direct the answers you get.
    After all, personal life etc. may not accurately reflect how someone goes about business. Google can throw up a lot of irrelevnt red herrigns.

    At the risk of opening a can of worms, Google me and I am sure you’ll be surprised at what comes up (but don’t judge without asking me ;-)
    Thanks again Jayne.

    FS Concierge, post: 48823 wrote:
    Hi David,

    A colleague and I both got stung by one of those people that never had any intention to pay a while back. The whole thing may still end up going through the small claims court, so I won’t go into the details here.

    However, one thing we learned after the event was that a simple Google search would have given us enough information to know that we didn’t want to have anything to do with him.

    I’ll be very interested to learn what solution you come up with.

    Cheers,
    Jayne

    #1040202
    I hate My PC
    Member
    • Total posts: 31
    Up
    0
    ::

    Thanks Jake,
    I’ve tried all that…oh how I’ve tried.
    It is all this “pursuit” that has led me to ask the “prevention” question :-)

    Emroy, post: 48809 wrote:
    Hello unamed,

    I’m not sure to what extent you’ve gone to chase these debts, or how many different ideas you’ve tried.

    I had a few clients who I thought were similar – Had no intention of paying and fobbed off each request I made.

    I changed my tactic and approached them on a personal level as opposed to a business one – Speaking business owner to business owner and explaining the effect their late payments are having on my operations.

    Both have now paid – (One 45 days, one 60 days).

    Have you tried any new tactics?

    – Jake

    #1040203
    Mynda – My Online Training Hub
    Member
    • Total posts: 5
    Up
    0
    ::

    After being stung once we now always ask for a deposit. If they baulk at the deposit then it’s likely they’ll be difficult to get the balance out of.

    If they want it they’ll pay a deposit. And if they don’t want to pay a deposit then we don’t want their business. It’s very black and white for us.

    With customers who we have an ongoing relationship with we’re a bit more relaxed as we have a payment history with them. The ones who take a long time to pay, always have to pay a deposit, the ones who pay on time we don’t ask for a deposit unless we have a large capital outlay for the work.

    We try to make sure the deposit covers any out of pocket expenses we have for materials so if they don’t end up paying we have only lost the money for our time.

    Of course without knowing what your business is I don’t know if this is feasible for your business too.

    In our experience it was better to let it go and focus on moving forward rather than worring about the past and letting it eat away at us. It was a huge relief once we decided to stop pursuing it.

    All the best.

    #1040204
    Anonymous
    Guest
    • Total posts: 11,464
    Up
    0
    ::
    IH8MYPC, post: 49406 wrote:
    Hi Jayne,
    That is a great idea…the Google search…can’t believe I didn’t think of it :-)
    What questions/searches did you ask/do of Google?

    Hi David,
    We googled a combination of the man’s name and the names of his two businesses. There turned out to be two quite famous people with the same name as him, so we had to subtract those terms from the search. After that, voila, details of court proceedings against him by someone who’d been stung before… for about 20 times as much as he owed me! Other legal documentation too.

    Oh well, you live and learn!
    Jayne

    #1040205
    I hate My PC
    Member
    • Total posts: 31
    Up
    0
    ::

    Thanks Jayne.
    I’m amazed the previous victim didn’t then get sued for breach of privacy.
    Just as well for you though.
    Regards
    David

    FS Concierge, post: 49422 wrote:
    Hi David,
    We googled a combination of the man’s name and the names of his two businesses. There turned out to be two quite famous people with the same name as him, so we had to subtract those terms from the search. After that, voila, details of court proceedings against him by someone who’d been stung before… for about 20 times as much as he owed me! Other legal documentation too.

    Oh well, you live and learn!
    Jayne

    #1040206
    I hate My PC
    Member
    • Total posts: 31
    Up
    0
    ::

    Thanks Mynda,
    I do require deposits for out of pocket equipment purchases.
    However, 99% of what we do is service based.
    Being in computers it is probably near impossible to get a deposit on services.
    It is often hard enough getting people to understand what we’ve done for then after the fact even if we’ve saved their bacon big time.

    Thanks for your suggestions though.
    It is all helpful.

    Thanks
    David

    Mynda – My Online Training Hub, post: 49417 wrote:
    After being stung once we now always ask for a deposit. If they baulk at the deposit then it’s likely they’ll be difficult to get the balance out of.

    If they want it they’ll pay a deposit. And if they don’t want to pay a deposit then we don’t want their business. It’s very black and white for us.

    With customers who we have an ongoing relationship with we’re a bit more relaxed as we have a payment history with them. The ones who take a long time to pay, always have to pay a deposit, the ones who pay on time we don’t ask for a deposit unless we have a large capital outlay for the work.

    We try to make sure the deposit covers any out of pocket expenses we have for materials so if they don’t end up paying we have only lost the money for our time.

    Of course without knowing what your business is I don’t know if this is feasible for your business too.

    In our experience it was better to let it go and focus on moving forward rather than worring about the past and letting it eat away at us. It was a huge relief once we decided to stop pursuing it.

    All the best.

Viewing 15 posts - 1 through 15 (of 22 total)
  • You must be logged in to reply to this topic.