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Tips to keep your ship afloat

“A ship is always safe at the shore – but that is not what it is built for.” - Albert Einstein

24 November 2014

Donna Cooper, General Manager, Baycorp NZ.

“A ship is always safe at the shore – but that is not what it is built for.” - Albert Einstein

In today’s globally interdependent market place, risks to businesses are no longer isolated by industry or location. In 2013, Forbes conducted a study of the top 10 business risks which demonstrate just how necessary it is to manage and mitigate risk to keep a business afloat. 

Baycorp has developed its own top 5 credit management tips to maximise your organisation’s collections and minimise risk; whilst some may seem obvious these insights are as a result of what we’ve learned working alongside New Zealand businesses for the past 58 years.

  1. Don’t be last in line to ask for your money. Sometimes we sense an apprehension from organisations to ask for what they are owed or a reluctance to pass it onto a collections company if they are struggling.  If a debt is worked at early, you have a much better chance of recovery.  
  2. Different people respond to different things; this goes for your customers too. Try using a range of channels to communicate to your audience, change your debt collection tactics from time to time and always ensure that the payment deadline and penalty information is clearly spelt out on your invoice communications to ensure customers pay on time and every time.
  3. Customers can be transient but that doesn’t mean they can’t be found. Even if your customers move to Australia they are not outside your reach. New legislation allows for a New Zealand judgment to be registered in Australia to recover monies owed.  Skip tracing is a very important element for debt recovery and a good debt recovery specialist should be able to assist you with this. 
  4. Not all debt is the same. How debt is treated will differ based on the types of debt that is required to be collected. Customers respond differently and in order to maximise your return we suggest that you look at collecting your debts in different ways and in some instances the development of a bespoke service might be the right solution.
  5. Find a Debt Collection Agency that is prepared to partner with you. Above all, find an agency that is prepared to listen and understand your debt. A good agency will base pricing on demographics and propensity to pay, they will have a call quality monitoring programme in place as well as a robust compliance regime and formal disputes resolution process in action. Most importantly, they will have a proven record in debt resolution that can be tailored to your business needs.

How an organisation deals with conflict and problems is the marker of their reputation.  Collections is that pointy end of your relationship with a customer. So balancing business return and reputational risk is critical. Because here’s the thing about debt. Nobody wants it. It’s also personal. Every debt is a different story, about people, about conversations, agreements, promises and good intentions. It’s just that the intentions went wrong somewhere along the way.

Your own team or a good Collections partner doesn’t forget that.

Source - SOLGM Annual Summit Article (November 2014)