September, 2020 | Recruitment and Job Agency

How to Retrieve Outstanding Debts for Companies

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With the ongoing pandemic, overdue trade debts and debt defaults have been increasing for many companies. Bad debts can negatively affect a company’s cash flow, and deters possibilities of recovery and growth.

It is very stressful for company leaders and their colleagues managing account receivables. On time payments are lifelines to stay in business. What can companies do to get out of such situation? How do you get your customers to pay up their debt and still maintain a good working relationship? Not to worry, as we shall reveal practical ways to get your company out from bad trade debts.

How to avoid delays in debt collection

Charge specific interest on late accounts

The first thing to do when dealing with customers buying on credit is to discourage late payments. You might decide to charge an agreed interest on the debt if the payment is delayed beyond a particular time frame. Debtors would want to avoid paying more interest and hence pay on time within the stipulated credit window.

Make sure that debts and loans are guaranteed

If the debt amount is very high, the creditor company should have someone to stand as a third party guarantor before issuing out credit or loans. The guarantor should also sign an agreement to pay up the loan if the debtor defaults on payment. Some companies give out credits to customers based on trust, but having the debts guaranteed may help retrieve debts.

Be flexible with repayment plans.

One way to encourage your clients to pay off their debt in time is to encourage them to choose a repayment plan that is suitable for them and also something you can accommodate. You can offer them about two or three repayment options that allow them to pick the most convenient one.

Have an understanding of what the law says about collecting debt

Different laws guide the process of debt collection. The Singapore debt repayment scheme highlights the necessary requirements to enforce debt repayment and also gives a clear rule on debt forfeiture after a six-year window.

Set a deadline

Ensure that you set a particular date as a deadline for debt repayment. Every debt should have a time frame for repayment, and both parties should agree with the said repayment date before debts are given out to a customer.

Send reminders to your debtors

When the agreed repayment date has passed, you should send a reminder to your debtors, reminding them of their payment obligation. There might be a need for you to send several reminders and change your language’s tone, depending on their response. You can be stern but still polite when sending reminders.

Call your debtors at the appropriate time.

You can call your debtor company’s person in charged to demand payments if you do have access to their phone numbers, which of course, you are supposed to have. However, it is advisable to call at the appropriate time and leave a voice message if you can’t reach the customer.

Be civil with your attitude

Avoid being nasty and rude to your debtors because that is unprofessional to act that way when collecting debts. You do not have to take things personally. Endure that you appeal with your debtors to pay up, and if your appeals do not yield any positive results, you might have to get your lawyer involved.

Offer a deal to your debtors

You can make use of a carrot-stick type of approach to collect debts from customers. Offer a deal to your debtors that might encourage them to pay off their debts quickly. You can offer them an incentive or a waiver by a certain percentage if they can commit to paying off their debt before a particular date.

Accept installments

Accepting installments is one of the ways to get your customers to pay their debt. Debtors experiencing financial difficulties might see this as an easier way of getting to pay off their debt. The number of installments should be agreed upon by both parties.

Be persistent but try to be patient

While there is a need for you to be persistent with collecting debts, you also have to exercise patience in dealing with debtors. There are reasons why debtor companies might not be able to fulfill their financial obligations. You might want to exercise more patience with a debtor until you are sure that the company you may be dealing with is an unrepentant and a chronic debtor.

Hire a professional debt collection consultant

A professional debt collection consultant has relevant knowledge and experience in dealing with debtors and can help your debtors pay up their debts. Hiring a professional debt collection consultant might spare you the stress of getting involved in the debt collection process. However, most debt collection consultants charge a particular percentage of the debt as payment for their services.

Accept assets as a cash replacement

You might choose to accept assets of similar value as cash replacement when offered by a debtor. A debtor might not have the cash to pay but might have an asset of similar value to offer you. Although most debtors might not be willing to initiate this repayment approach, you might let them know that you can accept cash replacement assets if provided.

Last Resort – Legal Action

When all the above debt collection strategies fail to yield any positive result, you may have to consider filing a lawsuit. However, this will be the last option as that will mean an end to any future business dealings and if the case stretch over a lengthy period, legal charges may eventually cost more than the debts.

Bad debts can negatively affect a company’s cash flow and deters recovery and growth

Mistakes to avoid when negotiating with debtors

Before negotiating installments with your debtor, here are some mistakes you have to avoid; otherwise, you might end up being negatively affected:

Not having a written agreement with your debtor

Before agreeing with your debtor on paying by installment, it is best to have some form of a written agreement with your debtor. Provide a letter that states the original debt amount, the agreed installment amount, and the due date for each installment.

Failure to consider inflation and other market factors

The money owed you some time ago may be lower in value to the same amount currently. Factors such as an increase in inflation may be responsible for this. Also, the cost of such goods or services might have increased over time, these factors should be taken into consideration, and it is good to spell out to your debtor the consequences of extending repayment time.

Avoid installments that overstretch

Some creditors allow debtors to unnecessarily overstretch installments, which may make the repayment amount meaningless. It is best to agree on a repayment sum that is meaningful to you as a creditor and also convenient to the debtor.

Pre-litigation strategies to enhance claims and reduce litigation cost

A creditor must find out the financial health of a debtor before offering goods or services. Here are some pre-litigation strategies that you can use to enhance your claims and to reduce litigation costs.

Have clear agreement terms

A company needs to outline the terms of the agreement. The payment terms should also be spelled out, and your invoice should contain the exact number of days allowable for repayment by a customer.

Have a legally binding agreement

Apart from providing clear agreement terms, you have to ensure that your agreement is legally binding on your debtor. You can do this by providing keeping written records of the agreement through emails or via a form on your website where the creditor has to tick a box to confirm the agreement.

Review terms and conditions for payment before you agree to it

Ensure that you carefully review all the terms and contractual agreements, including late payment, administrative fees, percentages, and your ability to cancel or suspend your goods/services provided in a case of non-payment or late payment.

Consider full or part payment before delivering goods or providing services

You might want to consider requesting full or part-time payment before going ahead to make your goods or service available to a customer. Another thing you can do is to ensure that the last installment is completed before you complete your end of the deal.

How to avoid the legal time-lapse of the debt collection window

As a creditor, you should understand that debts do not last forever. Every debt, according to the law, has an expiration window. This means that if a company fails to collect its debt within this period, the company will have to forfeit its debt. In Singapore, the statute recognizes a six-year debt collection window. If a creditor fails to take legal action against a debtor’s failure to repay the debt before its expiration, the creditor has to forfeit the said amount.

Important terms and conditions of sale and service according to the laws of Singapore

Both parties must understand the terms of a contract subject to the non-exclusive jurisdiction of the courts in Singapore. According to the laws of Singapore, the standard conditions and terms of sale and services are divided into the following category.

Interpretation

The term buyer is appropriately interpreted in this section to mean one who accepts a quotation (Buyer)

Basis of Sale

The basis of sale highlights the written agreement between a buyer and a seller that is binding on both parties.

Specifications and orders

The order and specification section discusses all issues that have to do with quality, quantity, damages, goods specifications.

Prices of goods

Everything that pertains to the price of goods, including quotations, Goods, and Service Tasks, and price increase where applicable, is highlighted in this section.

Terms of payment

The terms of payment are spelled out in this section. Issues such as interest rate, payment method, contract cancellation, payment duration, etc. are discussed under the terms of the payment section.

Delivery

The delivery section highlights the mode of delivery, delivery dates, where the goods are to be received, and conditions or clause when goods are to be delivered in installments.

Risks and property

The risk of damage of goods during delivery to a buyer is well spelled out under this category.

Liability and Warranty

Subject to the risk of damage to goods, a buyer and seller agree on the warranty for goods, the warranty period, and both parties’ liability towards warranty on goods.

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Awesome Tips to Helping You Get the Career You Want

This article outlines a couple of tips for people at different stages in their careers looking to attain growth and advancement in their fields. It presents those tools that are readily available to them and gives an approach to utilizing them effectively to achieve their goals.

Becoming a ‘Breakout’ Star in Your Career – 5 Effective Tips.

Career Growth and advancement comes in a lot of forms, from moving up the corporate ladder to attaining more responsibility in your current position. To achieve any form of intended growth, it is paramount that you have a plan to guide you along the way. Charting a career roadmap will provide you with a basis and a foundation to help you consciously take charge of your career growth.

Here are five tips to get ahead;

Tip #1 – Defining Success

To begin with, achieving progress in your field requires that you define what progress means for you. Every individual has their own definition or understanding of success. Success is a relative term, and there is no wrong or right way to define it. For a fresh start-up employee, success might involve evolution from an entry-level position into a managerial role. On the other hand, veteran employees may define growth and success as venturing into a more powerful role with additional responsibilities and perks.

Whatever it is to you, it matters that you can recognize and define what’s most important to you in your career momentarily and futuristically. This level of forward-thinking will do you a lot of good moving forward because goals always require change and adaptation. Your aims may look different from what you want in five or ten years.

An active way to stay on top of your goals is a chart out where you are currently in your career and where you aim to be in a couple of years. A physical chart or e-document would do in this situation – to be kept handy and reviewed as you grow. This is the first step in building your career road map.

Tip #2 – Timelines and Goals

Another important step to actively achieve growth is the creation of goals and timelines. These two go hand in hand. Without timelines, it will be considerably more difficult to achieve your goals. On the other hand, timelines are just random schedules without goals attached to them. Setting goals give you something to gun for, whilst timelines reflectively keep you accountable and in lane deflecting diversions that may come along the way. Using these two tools effectively is a tested and proven formula for success in any field.

You should keep track of the biggest long-term goals and plans contained in your career road map. Then it would be best if you further break these into smaller actionable short-term goals. These goals and steps may require that you grow in certain ways or develop a budding skill or the other.

Whatever these goals demand, to achieve the grander plan, you’ll need to consider and chart out these little steps carefully. Once you’ve recognized and outlined those fleeting details, you’ll need to add them to your career roadmap. This step is very important, and the more details you add, the easier it becomes to achieve impossible goals.

Goals and timeline go hand-in-hand in achieving career growth

Tip #3 – Feedback

A great resource that is one of the most underutilized by career-oriented individuals is feedback. Feedback is a tool that helps you take note of your progress and ensure that you are on the right path to achieving your goals. A common mistake made by career professionals is that they limit feedback to just those given by their superiors.

In actuality, feedback should not just come from your bosses but also from your colleagues and peers. The insight received from your peers is invaluable, even more so as they offer a different view and perspective from what may be offered by your principals.

It would be best if you asked your peers to assess your strengths and shortcomings, especially individuals that you have worked together with in the past. If you have formal reviews on an annual basis, you should arrange a check-in meeting with your manager in between reviews.

If your current position is one of managerial capacity, you should ask your employees or subordinates for criticism as well. The goal here is to attain an external perspective of your flaws and strength so you can properly improve on yourself. Try to cast a wide net when sourcing for criticism and feedback, the more diverse your sources are, the more insight you stand to gain.

Tip #4 – Communicating with your Manager

When you are looking to grow career-wise, the more information and insight you have about your particular spheres of possibilities, the easier it will be become to find those roles that are better suited for you. Mostly, people do not realize the number of opportunities that pass them by because they were not informed or aware of them, to begin with. You need to know those career possibilities that exist within your company or field.

You should be constantly aware of those openings or slots that might suit your particular skills. Having a conversation with your manager is a good place to start. Let them be aware of your goals and aspirations and see how they can assist you in achieving them. This helps put you on their radar even if there are no openings at that moment and leaves you open to their help and consideration.

Let your manager know your goals and aspirations. They may be able to help you attain your goals

Tip #5 – Utilizing your Network

To achieve advancement in any stage of life, career included, you must have the help and support of your peers. ‘No man is an island.’ This popular phrase expresses the fact that human beings need each other to attain any level of growth or development.

Your network is your most important resource. Whether you realize this or not, it is an asset of individuals that make your goals a lot more attainable. When you need to define what success means to you, you can refer to your mentors or trusted accolades. When you are outlining your short- and long-term goals, you can refer to individuals that already achieved some of these goals and ask them for advice. The more understanding you have of these things, the more feasible your goals become.

An important thing to note is that nothing is set in stone. Your goals will continually evolve as you grow, and your network grows. Update your plans and goals as time goes and be patient with yourself; there are no perfect formulas to success. Best of luck!