Risky business and debt recovery

Personal credit is exceptionally in Australia.

Personal credit is exceptionally in Australia.

Nobody likes to turn away a customer asking for credit terms, but sometimes it's unavoidable. What's even worse is when you trust somebody to pay their bills on time and they default on their payments or suddenly become "unreachable".

Unfortunately, these exceptions to the rule are part of doing business in Australia. In a country with such a high level of personal debt, you are bound to come across customers who look good on paper, but can't meet their payments when push comes to shove.

In fact, according to the Financial Counsellor's Association of Western Australia, our nation has the second highest rate of personal credit in the world. So, how can you make sure you don't overburden yourself or your customers? 

Credit management

The first step to keeping your books balanced and your customers happy is to establish terms of trade that are accommodating, yet 100 per cent sound. While you don't want to exclude valid business, you don't want to encourage people to spend on credit if they don't have the capacity to pay it back.

Debt recovery

When trying to resolve an unpaid invoice, the Small Business Development Corporation recommends considering the realistic chances of recovering the debt, as well as how much time and resources you're spending on chasing bad debt.

Trying to track down recalcitrant customers could literally turn into "throwing good money after bad" if you don't have the training and means to deal with it.

Fortunately by outsourcing your credit management process and debt collection to an all-in-one provider, such as Commercial Credit Services, you are able to establish effective terms of trade from the outset. Additionally if you do need to follow up on outstanding debts, our in-house skip-trace programme makes it easy to locate customers who seem to have vanished into thin air.