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How to chase up your outstanding debts for your Sunshine Coast business.
Fiona McKinlay • Aug 03, 2018
Do you want to outsource debt collection or try to do it yourself? No one enjoys pursuing clients and perhaps alienating them, but cash flow is the difference between life and death. Unfortunately late payment is endemic where small businesses are concerned.
First steps
Straightforward, friendly yet persistent letters, emails and polite, calm phone calls and perhaps even a personal visit with all the information at hand often work wonders.
Letter of Demand
Remain professional and cool — no threats or intimidation — but, when reminders have not succeeded, sometimes a final demand in the form of a well-worded Letter of Demand with the amount and date of the debt and a full description will achieve immediate payment, saving court fees and solicitors’ fees.
Attach all relevant documents — copies of invoices, contract, terms, etc. — but never pretend to be a legal entity if you are not.
Just be calm and confident, write clearly and in detail without using legal language unless you know what you are doing. Never ever threaten or try to intimidate. If you really need a lawyer then hire one.
A Letter of Demand with all relevant details and facts shows that you are serious, prepared and preparing to start legal proceedings, and should be sent by registered mail, so don’t risk sending one if you are only bluffing. And don’t harass the debtor or send a letter designed to look like a Court document: just indicate what action you will take if the account is not paid.
To avoid overdue accounts
In future try to perform a thorough background check before offering credit and set safe credit limits. Take a deposit and only deliver goods when it has cleared. You might offer a discount for prompt payment.
There is a competitive debt collection industry in Australia, but that really should be a last resort. Perhaps now is the time to hand all your accounts and all the stress they entail over to our
Sunshine Coast bookkeepers, so that you can concentrate on running your company and leave the nitty-gritty to them.
And then there are employee payment summaries and the summary of income and expenses in a profit and loss statement, the record of debtors and creditors, asset purchases and expenditure on improvements, depreciation expense claims and capital gains tax, income tax returns and yearly reports, returns for PAYG withholding, fringe benefits tax (FBT), Goods and Services Tax (GST), and the taxable payments reporting system, meeting superannuation requirements… the list goes on and on.
With so many great software options including XERO, MYOB and Reckon. It’s vital for Balanced Bookkeeping and Business Solutions to be on top of them all. Our expert team can help tailor fit any software your business needs. We proudly keep the Sunshine Coast on top of their accounts. Ask us how we can help you today.
Balanced Bookkeeping and Business Solutions is a local Sunshine Coast company that provides a complete bookkeeping service and solutions for small to medium businesses and can cope easily with both the ATO and ACNC, so that you can pursue the far more rewarding and philanthropic business of fund-raising and distributing to the deserving foundation or trust of your choice.
Balanced Bookkeeping and Business Solutions is a local, Sunshine Coast business that provides a complete bookkeeping service and solutions for small to medium businesses. The principal of Balanced Bookkeeping and Business Solutions has worked in the accounting industry for over 20 years and is a qualified accountant and registered BAS agent, which means that you can discuss the pros and cons of casual and full time and part time employment, knowing that you will receive practical, constructive, valuable advice.
So, what is Fringe Benefits Tax? Simply put, it’s an extra tax that you cover for your employee that is for the benefit of the employee in lieu of paying them more money. The tax is calculated on the value of what is being used for FBT.
This is only a new initiative as we mention that came into effect as of the 1st of July 2018, so there are still a lot of questions to be answered. This is why a number of clients we serve on the Sunshine Coast have been coming to us at Balanced Bookkeeping and Business Solutions to see their options.
