Debt Concepts Ltd

17/08/2023

How to Manage an Accounts Receivable Portfolio

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Hi, am a Debt Collection Expert and a director of Debt Concepts Limited.

Before you outsource to a debt collector, it helps to minimise your accounts receivables as much as possible. This is where you need to have a clear strategy for managing accounts receivables. Finance staff may struggle to keep money flowing in while satisfying competing management objectives to minimize bad debt loss and maximize sales.

In the old collections world, collectors and internal finance officers often based decisions on their own experience and intuition, rather than using systems, technology and processes. However, this will not get you very far in today’s world.

So here are my 3 basic tips to manage your internal accounts receivables portfolio before you send it to a debt collection agency:

1. Learn the difference between desirable and undesirable accounts

Portfolio analysis can reveal valuable information about customers. By giving your sales department information concerning your top and bottom accounts they can target their efforts towards prospects with the lowest potential risk and best potential for long-term customer relationships and profits. The key is being able to create a chronological order of your accounts based on risk or any other relevant factor.

2. Use key metrics to track results

There are many metrics to evaluate: actual DSO (Days Sales Outstanding) vs. best possible DSO; receivables aging; the risk profile of the receivables asset; the number of collection contacts; and promises to pay secured, or dispute resolution performance, among others. These metrics measure levels of activity as well as results for asset turnover, risk and asset quality.

3. Identify under performing accounts

Learn to say no to those bad customers that never pay on time and are high maintenance. Use the 80/20 principle. Find out who are the top and bottom performing customers first.

10/02/2021

Is your company operating on the edges?
Are your sales not forthcoming?
Are you trading with refractory clients?

Look no further, Debt Concepts Limited is oriented and skilled to realize your huge receivables accounts in snap. Don't hesitate to contact us at 0789364920 for more information.

02/07/2020

How do you spot an up-and-coming area to purcahse land? Well Sarah Beeny advises you on the pointsbto look out in her book; PROPERTY LADDER, Profit from Property. Its an interesting guide to property mercahnts.

02/07/2020

Should one base their opinion to buy a propert on the information laid ouy in a valuation report?
Not really. Actually one of the biggest mistatkes made by first-time property buyers is to rely on the information liad out in the valuation report when deciding whether or not to purchase a property. The information laid out in this report mostly benefits the lender rather than the borrower and as such, its content shd not much bother a serious buyer for as long as due deligence is done to acertain ownership and basic particulars of the property.

24/05/2020

07/05/2020

Collecting During and after Covid-19

Someone asked me, ‘how can you collect while this pandemic goes on?’. Well, my answer is, debts are not going to pay themselves. They have to be paid by the debtors besides, our clients are creditors that still want responsible representation, there are a number of things to consider – people’s debts aren’t going to be magically forgiven, and any debt we are calling on is for goods or services rendered months ago before this pandemic come in effect but these are unusual times, and some compassion and humanity is needed in debt collections, now more than ever.

Fortunately, our company works with clients that allow us to be reasonable with consumers – a lot of our policies and procedures that have always been in place are now important to maintain and treating people with compassion and professionalism has always been important to us.

So what has changed?

Well, here’s what we do with the consumers we contact, regardless of current circumstances, and here’s what we are doing over and above that to be reasonable.

People Who Want To Resolve Their Debts

Nothing changes here – these consumers still have incomes, they still want to resolve their debts, and we can arrange for them to pay their debt in a painless manner. Some dozens of people have paid their accounts during this pandmic and their accounts will soon be closed once Paid in Full. Not all debt collection

People Who Want To Resolve Their Debts But Are Struggling

We’ve always been reasonable with people who don’t have payment in full – our standard policy is to try to negotiate payment in full either all at once or over payments. Furthermore, if a person/debtor is working with us, we will work with them. Our process does not change, but we understand that there may be more people struggling to pay than we talk.

People Who Can’t Or Won’t Pay

If someone simply isn’t’ willing to commit to payment, either because they don’t agree with the amount, or aren’t going to be able to resolve it in the long term, or are emotional because everyone is calling, under normal circumstances we let them know if they don’t want to resolve it with us, we’ll report it to the credit bureau as an outstanding debt, and check in with them in 90 days to see if things have changed. If the status remains unchanged, we may recommend legal action to take its course if our clients approve of it. We don’t believe it’s a good solution to call someone who has refused to pay day after day. That hasn’t changed, because if someone tells us they won’t pay the debt, we respect their position. However, if we see it fit to engage courts of law, we in consultation with our clients hit the road.

Conclusion

We aren’t here to take advantage of people, and our negotiation process still takes into consideration financial hardship. At the end of the day, we know that debt collection is one human being negotiating with another to resolve a financial issue … we’re just going to put emphasis on the ‘human’ part of things.

Thanks kindly,

Kakaire Emmanuel Waigumbulizi
Debt Concepts Limited
Nkrumah Road
Kampala

Sent from Yahoo Mail on Android

15/04/2020

When is the last time that you took a close look at who owes you money, how much they owe you, and how far overdue their payments are? If you aren't keeping a keen eye on your debtors or accounts receivables, you're missing a terrific opportunity to improve your cash flow.
No matter how much you love your customers, some of them invariably don't understand how important it is to you that they pay their bills on time. A day or two late isn't a deal. A month or two is a big deal because once your customers get in the habit of paying late, it becomes almost impossible to get them to start paying on time. If the amount owed is not too much and the invoice is not long overdue then a friendly note may be sufficient to motivate them to pay. However, if the amount owed is high and payment is not forthcoming, then you need to take a firm stand until payment is done. If the customer is still recalcitrant, you must hand him over to a COLLECTION AGENCY for further management before its too late for you to salvage anything. We at Debt Concepts Ltd, we are orientated to collect your debts, bad debts and written-off debts and bring your cash flow back to life.
Are you bothered by huge unpaid debts, don't hesitate to contact us at +256757777159. DEBT CONCEPTS, managing your debts with passion and profession.

20/11/2019

How to get your debtors to pay up

November 20, 2019 News

Debtors can have a crippling effect on any company and the longer companies let their bad payers get away with not paying what is owed, the more they will be letting their company sink deeper into debt, impacting overall bottom lines.

Hence, knowing the early warning signs of debtors is important to the survival of any business. You should already have analytical measures (financial ratios, poor credit records, etc.) in place to recognise debtors, but personality characteristics can also put your mind at ease or give you early warning signs. In doing so, you will be able to avoid the repercussions potential bad payers will produce. Moreover, in cases where you are encountering bad payers, you can employ a variety of methods to help you persuade your bad payers to make payment.

Signs of a bad payer

There are certain questions to keep in mind when dealing with a potential or new customer. These questions can help you figure out if a customer will be a bad payer, avoiding future debt for your business. These questions can be along the lines of:

Does your customer seem to have a tendency to procrastinate?

Procrastination is a general feature of bad payers and can be a worrying sign. These individuals often postpone meetings and take a long time to return calls.
Are there signs that your customer might be in denial regarding their over-indebted financial position?
Bad payers often persuade themselves and others that the amount of money they owe is minimal, regardless of the size of their debt. Debt in itself is not bad but hiding from its implications can be catastrophic. Be on the lookout for customers that don’t have a plan to manage their debt.
Does your customer avoid taking personal responsibility for their financial situation?
A poor credit history does not necessarily indicate a bad payer, but responsibility needs to be taken for past mistakes. Bad payers often provide convincing reasons why it’s not their fault they have not been financially successful in the past and have accumulated excessive amounts of debt.
Is your customer administratively weak?
If a customer is unable to provide basic information like financial statements, identity documents, and records it could be a bad sign and should not be ignored in your credit assessment.

Approach debtors with these strategies

When it comes to debtors, you desperately need to get your funds from them but at the same time, you really don’t want to destroy the relationship you have with them. Luckily, there are ways to persuade your debtors to pay without severing a relationship with them.

Consider charging interests on late payments

First, you have to do your best to discourage customers from late payments. However, if a customer is just not paying, you can charge interests on late payments. This encourages debtors to pay as they will always try to prevent accumulating more debts through interests and in turn, would want to settle their bills on time.

Allow customers to choose repayment plans

You can also encourage your debtors to pay off their debt by allowing them to choose the most suitable payment options for them. You can offer them two or three different options and allow them to select the most convenient option for them. This keeps both you and the customer happy as they will be able to pay off their debt and you will get the money owed from them in return.

Send reminders

When the deadline set for repayment has lapsed, you can start by sending polite reminders to your debtors to remind them of their obligation to pay. You may need to send several reminders in which your language would get increasingly stern but polite nevertheless.

Call at the right time

If you have access to the debtor’s phone number, you can call them up to request payment, but you should ensure that you call at the right time when the person would be available to pick up your call, otherwise, you risk upsetting the client, or they may not answer the call at all.

Keep your attitude in check

Being rude to debtors is a very unprofessional way to go about requesting payments. Not only will you be putting the reputation of your company on the line, you risk the client not paying their debt indefinitely. It is always wise to remain professional so that the client will still respond to your emails or pick up your phone calls.

Offer your debtors deals

You can persuade your debtors to pay by offering them deals. You could offer to waive off a certain percentage of the debt or offer some kind of incentives which would encourage them to pay off the debts. Just make sure that the ‘deal’ you are offering your debtor does not hinder your business financially or encourage the debtor to make late payments in the future.

Suggest installments

As a business owner, you need to be empathetic when it comes to a customer as there may be certain unforeseen circumstances that are causing them to be short on cash, such as a death in the family or job loss. A way to show your empathy is by encouraging your debtors to accept installments which would make it easier for them to pay.

Be persistent but patient

While you need to be persistent about collecting your debts, you also need to be patient with your debtors. People have different reasons why they are unable to meet up with their debt repayment obligations and until you are sure that you are dealing with a debtor that has no legitimate reason for not paying, it is beneficial to be a little more patient.

Threaten to inform credit bureaus

Everyone knows the importance of keeping a clean credit record so as to maintain a good credit. A poor credit rating is not something anyone would want to have on their hands because it can stand in the way of so many things in future. A poor credit score may make it impossible for a person to get loans or even business investors. So, if you have a debtor who is unresponsive and appears unwilling to pay off their debts, you can threaten to report debtors to credit bureaus and you just might start to receive some response.

Get your money back

All in all, no matter what industry you are in, it is never ideal when a customer becomes a debtor that is affecting your business. Collecting money isn’t fun, but you can be assertive without being threatening, and civil without being ineffective. It’s your money, so there is no reason to feel reluctant about using bold tactics to collect it. And not having to write off losses from bad debts can make a significant impact on your balance sheet.

Contact Debt Concepts Ltd on 0757-777159 and we can assist you to deal with bad payers, help you recover any outstanding amounts owed to your business.

20/11/2019

What Is a Debtor's Examination?

A debtor's examination is a special proceeding used by judgment creditors to look into ways it can collect a judgment from you, such as using a wage garnishment or attaching funds in a bank account. However, many judgment creditors use debtor's exams to pressure you to pay a debt.

At the debtor's exam, you are required to answer questions, under oath, about your finances and ability to pay the judgment owed to that creditor. The judgment creditor will ask you questions about:

whether you own any assets, including real estate and bank accounts

how much other debt you owe, and to who, and

your employment information, including income and where you work.

A debtor's examination is usually conducted in court (sometimes in a private room), but can also be held at the judgment creditor's attorney's office. It typically lasts no more than 15 to 30 minutes. Once the exam is over, you are free to leave.

Often, a debtor's examination is a harmless affair. If you have no assets and income that the judgment creditor can grab, then this might be as far as the judgment creditor can go with you. Once it learns you have nothing to give, it might walk away. Or, the debtor's exam can be a good opportunity for you to negotiate a settlement with the judgment creditor's attorney, face-to-face.

11/10/2018

How to deal with late payments on invoices without feeling rude or awkward

Written byKaty Cowan

21.03.2018



Image courtesy of Adobe Stock

You've done the work. You invoiced the client over 30 days ago. You're still waiting for payment a week over the invoice deadline. It's time to chase but, quite frankly, you'd rather play Justin Bieber on constant repeat and stick red hot nails in your eyes than speak to your client.

Let's face it. Chasing late payments on invoices is one of the toughest and most awkward jobs for any small business owner. It's never easy, emailing or phoning a client to ask for money. But this is business. And you are entitled to be paid for the work you've carried out.

If you're struggling and you're sick and tired of dealing with late payers, here are our top tips to help you get over that awkward hump (and avoid any issues).

Don't think you're being rude

Firstly, you've done the work and the client is happy, so you're entitled to get paid. And, more importantly, you're entitled to get paid on time. You're not a bank. You're not able to work in credit. If you don't get paid, you can't pay your bills – full stop.

With all this in mind, you should stop thinking you're being rude by chasing payments. It's the client who is being rude for not paying! Plus, you are totally within your rights to ensure you settle invoices. Remind yourself of these points whenever you feel yourself hesitating in future.

Set terms and expectations early on

Terms of invoicing are one of those things that every small business owner will have to establish with each client. Talking about these terms early on will avoid any awkwardness further down the line.

Not sure what terms to apply? You really can set your own. You can request payment upfront, although this might be challenging. (You could tell brand new clients that the first invoice always requires payment before work begins – just to get going. It's worked for me!)

You could ask for a deposit – try 50%

21/09/2018

True

Coming up Tuesday: Keep your agency on the right path with seminar on Ethical and Professional Collections https://bit.ly/2PHqvbG

13/09/2018

For a healthy cash flow, you must adequately manage your accounts receivables.
When is the last time that you took a close look at who owes you money, how much they owe you, and how far overdue their payments are? If you aren't keeping a close eye on your accounts receivables, you're missing a terrific opportunity to improve your cash flow and your probably running to the trenches. Contact Debt Concepts at +256757777159 for debt counseling.