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  • #970463
    agnes
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    I have a few small debts (around $100). Even though the clients were contacted many times, they have no intention of paying. (One was sent a letter of demand threatening legal action/debt collection, etc.) However, they are just ignoring. Small debts, but it is affecting my cash flow, especially my business is quite new. The debt collectors i found don’t want to know about debts under $200. Any suggestion please? (We are in Sydney.)

    #1044347
    Anonymous
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    Hi Agnes,

    How frustrating!

    I’m sure there are some people around here who’ll be able to advise you, but in the meantime, it might be helpful if you can explain how much in total you are talking about, and how many customers/accounts that sum is spread across.

    It might also be interesting for you to have a read of this recent thread: http://www.flyingsolo.com.au/forums/money-matters/9658-debt-collection-agency-sml-claims-court.html

    Good luck, and welcome to Flying Solo.
    Jayne

    #1044348
    jasonm
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    Hi Agnes,

    At our last meetup in Canberra we spoke about exactly this situation, from the point of view of making a business out of following up these small debts.

    The idea was basically a harassment service rather than formal debt collection for a flat fee.

    Is this something you would be interested in?

    – Jason

    #1044349
    DavidThomas
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    Hey,

    I use http://www.profcoll.com.au, for similar sized debts – with only small success – but unfortunately its just one of those things you have to deal with running a business.

    My advice is to throughly vet your customers before suppling services to them. I have had positive responses a number of times when I questioned a customers contact details (explain its due to some fraudulant customers and you want to continue suppling your services at the same ‘discounted’ rate so your trying to avoid these sorts of fruadulant customers).

    Anyone who won’t give you further information .. you’ve probably dodged a bullet.

    Also, set some guidelines for emails (for internet based business), I stay away from gmail/hotmail/ anything else I deem suspicious.

    #1044350
    DebtCollector
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    Hi Agnes,

    The bigger agencies aren’t intrested in small accounts and to be frank across the board they have a crappy success rate per debt, but they have big volumes. The trouble with them is they have a procedure they follow for about 3 weeks and if they don’t collect in that time frame they will notify you that you only option is court action as they don’t want to waste time on your piddly little debt with a small commission as they have bigger fish to fry.

    They tend to rely on the big comany like electricity and telcos with their trump card being ” If you don’t pay we will cut off your service”

    By law you have six (6) years to chase that account. The trouble with most small businesses is they give up only after a few letters and put it in the to hard basket. When ever you are chasing a debt you have to have a steely resolve. And it’s not about harrassment, it’s about wearing down their excuses
    of not paying.

    As I have said on previous posts I’m more than happy to give free advise on exhausting all your avenues before other action is needed, as long as you ring me. I don’t have time for long winded emails back and forth.

    #1044352
    JacquiPryor
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    Hi Agnes,

    This might sound silly… but, have you tried ringing these people (as well as sending letters of demand etc)? You say they have no intention of paying, but how do you know that? Have they actually said?

    Whilst I appreciate they should have paid by now, sometimes a phone call can resolve the situation – they might be waiting on payments too, or there could be some reason for the delay/non-payment. Maybe you could make payment plan arrangements with these clients?

    Because of the trouble you seem to have with debt collection agencies not wanting such ‘small’ debts perhaps working with the clients could get at least some payment?

    Also – if not already done, ensure any payment terms or terms of service documents you have set out that any costs associated with chasing unpaid accounts will be their responsibility not yours… you don’t want to spend $100 only to find you are not able to collect the costs and therefore have spent as much as you were owed in the first place.

    #1044353
    MH08
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    I experience this daily, actually our company loses money monthly, and it’s not a few hundred dollars or few thousands so I won’t get into further detail.

    But the best line of defence is having the director/owner/partner/sole trader sign either the contracts or the account forms so it’s easier to chase them down when it elevates to a legal matter.

    Don’t be afraid to turn business away if they’re not willing to sign on the dotted line to protect yourself and them to acquire in real property from the client/customer if they do not honour any agreements.

    Many will argue following legal procedures, Consumer protection laws, ACCC, ASIC and which ever legal body, though to be honest thats a very slow process and nothing ever comes from it.

    #1044354
    Enviro Footprint
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    Had a personal debt I was chasing a few years ago…

    Went to see local court house, got a statement of demand, or something like that, cost $55, was added to the debt, if they didn’t pay the sheriff does repos then auctions to recover money.

    If I had their bank details they can take straight from their account. This is a step through the Local Magistrate.

    Don’t know if this works for business debt…
    But the guy paid quick smart when the notice was delivered by the sheriff.

    #1044355
    Cooke Consulting
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    Hi Agnes,

    Jacqui has pretty much saved me the time of writing a full reply (thanks mate :P) as what she wrote is pretty spot on.

    Inherently debtors fall into two categories those that ‘Can’t Pay’ & those that ‘Won’t Pay’, the question for you is which one do they fall into?

    Feel free to send me your contact details (I’m Sydney based as well), I’ll be happy to give you some free advice or alternatively check out our blog post ‘Do You Have a Debt Management Strategy‘ that might give you some pointers.

    All the best.

    Regards
    James

    #1044356
    SuzsSpace
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    I hope the people replying directly to the opening poster realise this thread is three years old. While the information posted maybe useful there’s no point asking them to respond to you.

    #1044357
    JacquiPryor
    Member
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    Can I blame baby brain?
    Doh! I am normally quite good at noticing date of Original Posts…

    #1044358
    SuzsSpace
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    You’re more than welcome to blame baby brain, I often blame menopause brain. I generally don’t notice the dates but I was getting deja vue and scrolled up, turned out I’d read it before. Partly to see if there was anything I could do about a similar problem I’ve had but I think it’s not worth it financially for such a small amount.

    #1044359
    HPY
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    High Suz
    I never notice the date on the forums either.
    Being owed small amounts is hard because the cost of the normal recovery options available generally outweigh the debt owed.
    I have always found that the squeaky wheel approach works well in these instances. It doesnt matter whether it was $10 or $10,000, they owe you the money, it is simple as that.
    The problem is that the late payers/non payers out there know that the costs to recoup a small debt are often greater than the debt and use this to their advantage. Don’t give up because those people will continue to “not pay” if they think that they can get away with it.
    Regards
    Mat
    hasntpaidyet.com

    SuzsSpace, post: 173525 wrote:
    You’re more than welcome to blame baby brain, I often blame menopause brain. I generally don’t notice the dates but I was getting deja vue and scrolled up, turned out I’d read it before. Partly to see if there was anything I could do about a similar problem I’ve had but I think it’s not worth it financially for such a small amount.
    #1044360
    SuzsSpace
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    Hmmm. That’s food for thought that is. I didn’t do that, I asked a couple of times then gave up. Not very good at being the squeaky wheel, on the other hand I haven’t done any more work for her since then so she lost out more than me. I wonder if it’s too late more than a year later for a very small amount. I suspect it is.

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