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January 2008
 

The Outlook

The financial pain of Australian Households is tangible. Food and Fuel cost are set to escalate further. Interest Rate Rises have continued to create Mortgage Stress with a dramatic increase in the number of House Repossessions.

Debt has been rising 50% faster than income over the last 15 years.

About half of all business debts were less than $400. Half of those were young people under 32 years of age. Studies show that these people will be 6 times more likely to default on larger amounts of credit. Creating a

culture of debt fraud in our communities in the future.

Businesses are failing every day and Bankruptcy is now common place and rising at about 15% per annum. We all need to be much more vigilant in collecting more details about our clients.

Businesses are competing more with each other to get paid first. If you are not proactive you will be put at the bottom of the list to be paid.

Many businesses are now leaving debt collection to the professionals. We are not just being called as a last resort, but as soon as payment promises are broken.

We become an important, specialized extension of their own office, to receive payments in regularly. We have the experience in handling the debtors, coupled with the legal status, and persistence needed to recover those outstanding debts.

 
New Clients in 2007

More than 80 new clients from across Gippsland, Melbourne, Mornington Peninsula and Phillip Island have entrusted us to collect their debts.

We are finishing the year with a collection rate of 92% which is remarkable as we often took on a backlog of old debts, many deemed as ‘unrecoverable’ by other Collection Agencies.

 
New Software for Countrywide Collections

Countrywide Collections is growing rapidly and has recently invested in an Internationally renown Software System.

The System allows us run a more efficient business and maintain our modest fee structure. It handles the scheduling of calls and letters, documentation of all activities, administration, reporting and accounting functions.

 
Penalty Interest Rates

Both main Political Parties were lobbied to embrace a ‘Late Payments Act’. This legislation would legally allow businesses to charge interest on money owed to them.

If you are presently charging interest the scale of charges need only by 12%, which is the current rate used by the Courts under The Penalties Interest Act 1983.

It is easy to calculate at 1% per month and should be noted (with the cost of debt recovery) on all Invoices and Statements.

 
Success in 2008: Not Making The Same Mistakes Again

Many experienced Business operators are rightly cynical about giving credit to new clients.
However we all need new clients and they should be treated well. Probably every second one could become a regular client worth having.

It is in the interest of all honest people that you check the identity and details of that new client. Using the paperwork and conversation to glean information. Asking about their trade or employment is important as dishonest people often look for credit just before they move house.

You need to have confidence in the knowledge that your Job Sheets/Invoices/Statements/Credit Application Forms are up to scratch.

Revamping your paperwork to meet the challenge of 2008 is a must for all of us. Forms designed to get information is one way to protect yourself against dishonest people.

Remember to put a time limit for any complaints, disputes and guarantees — see your industry / association for recommendations. A clause to transfer the expense of debt collection charges onto them is also a good idea.

Countrywide Collections is available to make recommendations.

 
The new year is a good time to act on those accounts outstanding.
 
Previous
A Country Living On The Edge (May 2007)
April 2007
 
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