How To Get Free Debt Collection
Ask 100 business owners why they don't refer their overdue accounts to a debt collection agency sooner and 72 will tell you the same thing... they can't stand the thought of someone else (i.e. the debt collector) gorging on money that's rightfully theirs.
Ask 100 business owners why they don't refer their overdue accounts to a debt collection agency sooner and 72 will tell you the same thing... they can't stand the thought of someone else (i.e. the debt collector) gorging on money that's rightfully theirs.
As you may or may not know debt collectors generally charge 2 sets of fees: an up-front engagement fee to pursue a debt and a commission on every cent they recover. And while most debt collectors charge a commission of around 20% some of the less scrupulous firms will whack you with outrageous commissions of up to 45%!
However, by simply displaying 10 powerful words in your business you can instantly immunize yourself against being fleeced by these fees.
So what's the magic cure?
Simple!
Just erect a notice visible to your customers that says:
"Unpaid Accounts Will Incur Late Payment Fees And Collection Costs"
From that moment on any new invoices you refer for debt collection, every cent spent to recover that money will be passed directly on to your debtor. After all, they've defaulted on payment. They're the ones who should be penalised, not you. This way you won't ever pay a cent for recovered debts.
As powerful as this wording is there are 3 critical rules you need to obey...
1. Wording Is Critical.
Your notice must display the words "Unpaid Accounts Will Incur Late Payment Fees And Collection Costs" If you change this in any way chances are you'll compromise your right to charge penalties and pass on collection costs. So stick with this phrase and you'll be covered.
2. Location Is Critical.
For this notice to legally empower you to pass on collection costs it must be displayed where a customer can see it BEFORE they engage your services or purchase your goods. So if your customers can engage your services without actually stepping foot on your premises, displaying this wording only in your office will NOT give you the right to pass on collection costs.
A good example is a plumber doing house-calls. If the wording isn't displayed in a place where the home-owner can see it before the plumber actually touches a pipe then they can not pass on collection costs should the home owner default on payment. Whether the home owner reads the notice or not is irrelevant. What's important is that this wording is displayed where it can be seen before any work is commenced.
Furthermore, if you write quotes or extend credit then the respective documentation must include this wording. Similarly, if you conduct business online then your website must also include this statement.
3. Timing Is Critical.
Displaying this sign today does NOT give you the legal right to pass on collection fees for existing invoices. So if your current Terms of Trade do not allow you to pass on collection costs, putting up this sign will not miraculously allow you to do so on existing overdue accounts.
Sure, it's tempting to think to put up the sign today and then refer your existing bad debts to a collection agency. Now while you might get away with it, if you get caught you'll be up for a $200,000.00 fine! My advice: forget about trying it on with your current debts. Put up rthis sign and cover yourself from this day forward.
At the end of the day, it's your money. Don't allow yourself to be penalised to get it back. Put this sign up in your business today and you'll be covered.
Ask 100 business owners why they don't refer their overdue accounts to a debt collection agency sooner and 72 will tell you the same thing... they can't stand the thought of someone else (i.e. the debt collector) gorging on money that's rightfully theirs.
As you may or may not know debt collectors generally charge 2 sets of fees: an up-front engagement fee to pursue a debt and a commission on every cent they recover. And while most debt collectors charge a commission of around 20% some of the less scrupulous firms will whack you with outrageous commissions of up to 45%!
However, by simply displaying 10 powerful words in your business you can instantly immunize yourself against being fleeced by these fees.
So what's the magic cure?
Simple!
Just erect a notice visible to your customers that says:
"Unpaid Accounts Will Incur Late Payment Fees And Collection Costs"
From that moment on any new invoices you refer for debt collection, every cent spent to recover that money will be passed directly on to your debtor. After all, they've defaulted on payment. They're the ones who should be penalised, not you. This way you won't ever pay a cent for recovered debts.
As powerful as this wording is there are 3 critical rules you need to obey...
1. Wording Is Critical.
Your notice must display the words "Unpaid Accounts Will Incur Late Payment Fees And Collection Costs" If you change this in any way chances are you'll compromise your right to charge penalties and pass on collection costs. So stick with this phrase and you'll be covered.
2. Location Is Critical.
For this notice to legally empower you to pass on collection costs it must be displayed where a customer can see it BEFORE they engage your services or purchase your goods. So if your customers can engage your services without actually stepping foot on your premises, displaying this wording only in your office will NOT give you the right to pass on collection costs.
A good example is a plumber doing house-calls. If the wording isn't displayed in a place where the home-owner can see it before the plumber actually touches a pipe then they can not pass on collection costs should the home owner default on payment. Whether the home owner reads the notice or not is irrelevant. What's important is that this wording is displayed where it can be seen before any work is commenced.
Furthermore, if you write quotes or extend credit then the respective documentation must include this wording. Similarly, if you conduct business online then your website must also include this statement.
3. Timing Is Critical.
Displaying this sign today does NOT give you the legal right to pass on collection fees for existing invoices. So if your current Terms of Trade do not allow you to pass on collection costs, putting up this sign will not miraculously allow you to do so on existing overdue accounts.
Sure, it's tempting to think to put up the sign today and then refer your existing bad debts to a collection agency. Now while you might get away with it, if you get caught you'll be up for a $200,000.00 fine! My advice: forget about trying it on with your current debts. Put up rthis sign and cover yourself from this day forward.
At the end of the day, it's your money. Don't allow yourself to be penalised to get it back. Put this sign up in your business today and you'll be covered.
Author:
Publisher of the world's premiere online Debt Collection video training for business owners The Debt Doctor is a leading authority in accelerating and magnifying business cash-flows. To Recover Bad Bebts quickly and affordably -- as well as prevent them from occurring in the first place -- simply visit his blog.