Thursday 24 August 2017

Extreme Debt Collection Methods

Some trainee debt collectors in action
I’m sure there are many pre-conceptions about how debt collectors work, or how an effective credit controller goes about making sure that payments come in on time. However, I can say with total conviction that the tactics employed by a group of unofficial money-lenders in China are not part of the MCC portfolio.

It was reported in The Telegraph, the FT, The Sun and a few other places, that some rogue money-lenders had hired older ladies from outdoor dancing classes who then used highly intimidating tactics to get borrowers to pay up. Several of them have been jailed for doing things like shouting through a megaphone outside the debtors house to humiliate them in front of their neighbours, carrying out beatings, or even stripping naked in front of the debtor in the street and implying a sexual assault had taken place. Though Chinese authorities eventually caught up with this gang, imprisoning many of them for long sentences, here in the UK the law is very strict on personal and company debt as we’ve written about before.

When pursuing overdue debts, here at MCC we recognise that we are bringing a contractual obligation by a customer back on track after its gone awry. The tactics will therefore be polite, unemotional and business-like, but with a clearly articulated end-game where the debt is paid off to our client’s satisfaction. The outcome is not in doubt, we are just determining how we are going to get there. So far, shouting in the street, violence, or taking your clothes have not been necessary for us to collect millions for our clients. I, for one, am very pleased about that.

Thursday 17 August 2017

Lessons in Invoicing from the Milkman

For many years, we've had fresh milk delivered to our doorstep at home each morning.  I guess we like the idea that we were helping to keep a tradition going, together with the feeling that we were supporting a local small business.  No doubt the milk comes from farms near Chernobyl and the company is owned by a tax-dodging multinational, but it made us feel good.

I suppose it did all feel a bit antiquated, leaving handwritten messages when we were going away and cheques for payment rolled up and stuck in the top of an empty bottle for the delivery person to collect, so I wasn't surprised when the dairy wrote to us saying that they wanted to move to receiving payment of their invoices by bank transfer.

Unfortunately, when the next invoice arrived, it was obvious that this company hadn't read the My Credit Controllers article on how to design your invoice to get your money in quickly.  The invoice clearly stated that ALL PAYMENTS SHOULD BE BY BANK TRANSFER, but the crucial information was missing - the details of the bank account to which they wanted a remittance made.

Of course, this isn't make or break, it just slows down payment from people who want to pay you and perhaps gives cover to others who want to delay payment as long as possible.  The real clincher , and what unfortunately lost the company a customer, was that the office didn't reply to repeated requests for the bank details.  As the weeks went by, we became more and more embarrassed about the money owing and eventually just cancelled the deliveries and left a cheque for the total outstanding.

So why not learn from the example of my Milkman?  Why make it difficult for your customers to pay you when it's so easy to make it simple?  Have a look at our guide to designing an invoice template and make sure your business is doing everything possible to get paid on time by customers.