Handling debt recovery is one of the toughest parts of managing a business. It can be difficult to maintain positive relationships with debtors when the outstanding amounts start affecting business operations. In these high-stress scenarios, businesses often make a lot of mistakes while handling their clients, which might result in conflict, a tarnished reputation, and the loss of valuable clients.

It’s important to tread carefully when you are recovering overdue debt. In this guide, we are going to look at some of the top mistakes that debt collection departments often make, and we will examine how these mistakes will affect your business in the long run.

01. Failing to Keep Accurate Records

One of the worst mistakes you can make is to slack off in administrative duties. If you cannot properly keep track of debt and documentation, you could miss some invoices or payments. This can result in inaccurate debt totals and might result in hefty arguments with the debtor.  A good example is to send a debt invoice over to a client who has already made a payment. Your client might view this as a sign of incompetence on your side, and they will soon start questioning everything about their account. 

It is very important to keep detailed records of all invoices, payments, and client correspondence. The documentation isn’t just necessary for staying professional; it can also become crucial evidence when legal action is required.

02. Delaying Debt Recovery Actions

It is very common for businesses to start slacking off in debt recovery actions when the workload becomes too much for their current debt department to bear. This can reflect negatively on your business. If you wait too long before sending out invoices or payment reminders to clients, they can easily forget about the debt they still have to your company. This can cause a lot of stress to debtors who might be caught off guard by accounts they thought were settled. The longer you wait, the harder it becomes to recover the outstanding amounts.

To avoid this, you should establish a clear credit control process with timely and regular correspondence. Clients should receive account statements at least once a month, and they should be reminded often to make their due payments.

03. Using Aggressive or Unprofessional Tactics

It is illegal to harass, threaten, or try to embarrass debtors in Victoria state. Using these unprofessional tactics will cause your client to lose respect for your business. These tactics can also tarnish your overall business reputation, especially if the general public learns about these unsavoury behaviours. 

The best way to stay professional at all times is to hire a professional debt collection agency in Victoria. These professionals are always objective and will treat all customers with the same standard, yet with a professional approach.

04. Handling Debt Internally

Handling debtors on your own might have worked when your business was still in the startup phase. But as your company grows, the debt will only become more and more complex. 

Outsourcing debt collection is a great way to free up some time for your employees and will ensure that everything is done accurately. 

Avoid Debt Recovery Mistakes by Hiring Professionals

If you want to avoid all of these common mistakes or want to reduce the workload on your accounts department, it can help to hire a debt collection agency, Vic Collect. Our skilled team is extremely proficient in debt recovery and will make sure that the clients are always treated in the best way possible. 

With Vic Collect, debtor accounts are properly managed, and communications with the client are handled in the most professional way. Contact our offices now to find out how you can get all of your overdue debt recovered with no upfront cost.