Debt Collection

The ins and outs of debt collection and what your business needs to know

What Is Debt Collection

Each time a business issues goods or services on credit to a customer, it accrues a debt and the customer becomes a debtor. At an agreed time, the debt becomes due. Debt collection is the process of recovering the cash that is owed to the business.

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Why use a debt collection agency?

  • Cash returns to the business
  • Save time and effort
  • Save staff from tedious tasks
  • No collection, no fee
  • Access professionally trained collectors
10 FAQs about debt collection services in Australia

Little known facts about debt collection

Did you know?
Licensed debt collectors are bound by professional codes of conduct and Australian debt collection guidelines to treat debtors fairly and reasonably and to communicate politely and with courtesy.

Did you know?
As an invoice ages it becomes harder to collect, especially if a debtor’s contact details or financial position have changed. The probability of making a collection reduces with every passing month.

Did you know?
In most Australian states, there is a six year limitation to pursue a debt; it then becomes Statute Barred. A debtor can claim complete defence of the debt if they assert the debt is Statute Barred.

Debt collection in Australia
10 red flags your business needs a debt collection agency

When do you need a debt collection agency?

 A debt collection agency acts as an agent for your business in the collection of overdue debts, and you typically pay a fee or percentage of the total amount collected. But when’s the right time to call in a debt collection agency?

  • Your cash flow is dwindling
  • You’ve wasted too much time chasing payment
  • Your staff dread the task
  • You don’t know how to proceed
  • You can’t contact your debtors
  • You have invoices you can’t afford to write off
  • You have a lot of aged invoices
  • You don’t have a debt collection strategy
  • Your stress levels are peaking

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Debt Collection in-house vs outsourced

Typically, a business moves through its own internal efforts and negotiations before outsourcing to a debt collection agency.
Your debt collection strategy should outline your options should your internal efforts fail to recover the cash that is owed to your business.

  • In House
  • Your business communicates directly with your debtors
  • You spend time chasing payment
  • You retain all the monies recovered
  • Your staff require training in debt collection responsibilities and activities
  • You can scale internal efforts with automation software
  • Outsourced
  • The debt collection agency communicates with your debtors on your behalf
  • Someone else does the chasing for you
  • You pay a commission or fee per collection. No collection, no fee
  • Access professionally trained cash recovery specialists
  • You can pay per service or subscribe for ongoing services

Some useful tips about debt collection

Payment delays in Australia are on the rise*. ezyCollect reverses the trend for its customers.

Tip 1

Get synced to your accounting system and start collecting in less than 30 minutes.

Tip 2

Automate, schedule, personalise & customise all your collection activities in minutes.

Tip 3

Keep the personal touch with polite, persistent reminders and thank you messages.

Tip 4

Faster collections means more cash and less interest. Be the first to get paid!