How Do Debt Collection Agencies Work

How Do Debt Collection Agencies Work

Collecting the debts you’re owed can be a tricky process. Since the vast majority of your clients and suppliers are honest businesses, it’s often the case that bad debts are caused by an inability or unwillingness to pay. If you find yourself in that situation, collecting the money you’re owed is challenging, and it’s even harder if you’re unsure about your rights and obligations as a creditor. Below, our debt collection services team are going to cover our 3 main guidelines for debt collection and how they can help your business manage its risk of bad debts ethically.

1. Keep Detailed Records

The most important rule of debt collection is to maintain detailed records of the work you’re doing. 

Unpaid invoices and other bad debts are an unfortunate reality of doing business. While you’re entitled to collect any money a debtor owes, this can often prove to be complex. The best defence you have against a non-paying debtor is to maintain written records of your contracts, the work you’re doing, invoices and any debt collection communications. This doesn’t need to be complex. Using email is enough to create a record that can be used as evidence when you need to collect a debt. As a guide, your records should include information such as:

  • The details of the contract between you and your debtor
  • Your debtor’s formal agreement to the contract
  • A clear description of the goods and services you have provided
  • Any invoices that you issue, including information about outstanding payments, due dates, legal details and payment methods


If you’re unsure, speak to your debt collector about which records you should keep to simplify the collections process.

2. Know Your Rights as a Creditor

If a debtor owes you money but is unwilling or unable to pay, you are entitled to contact them and request payment. Any contact you have must be reasonable - that means you’re never allowed to threaten, harass or physically intimidate a debtor.

To avoid harassing a debtor, it’s recommended that you minimise your contact to reasonable amounts at reasonable times of the day:

  • Avoid contacting a debtor by phone or email more than 3 times per week
  • Phone calls should only be made between 7.30am and 9.00pm on weekdays, or 9.00am to 9.00pm on weekends
  • Face-to-face contact should only be made between 9.00am to 9.00pm
  • Avoid contacting a debtor on public holidays

While collecting payments is a pressing issue, it’s important not to harass your debtor. Stick to phone calls and emails wherever possible. If you’re able to sort out a payment plan by phone or email, it’s not necessary to visit the debtor in person.

3. Work with a Professional Debt Collector

After you’ve made a reasonable attempt to collect the money you’re owed it’s time to pass the job onto a debt collector. A debt collection agency can offer ethical advice and services to help you manage bad debts without damaging your client relationships. In Queensland, professional collectors are licensed and regulated by the Office of Fair Trading. That means they’re always up to date on the rights and obligations of all parties involved. 

After you’ve made a reasonable attempt to collect the money you’re owed it’s time to pass the job onto a debt collector. A debt collection agency can offer ethical advice and services to help you manage bad debts without damaging your client relationships. In Queensland, professional collectors are licensed and regulated by the Office of Fair Trading. That means they’re always up to date on the rights and obligations of all parties involved. 

Working with a debt collection agency is an important part of developing your business. Building a strong working relationship gives you easy access to a solution for recovering money you’re owed. It also frees up your time and allows you to focus on running your business, rather than collecting debts. As a bonus, your collection agency can offer advice and help you take proactive steps to minimise the risk of being left holding bad debts.

Working with a debt collection agency is an important part of developing your business. Building a strong working relationship gives you easy access to a solution for recovering money you’re owed. It also frees up your time and allows you to focus on running your business, rather than collecting debts. As a bonus, your collection agency can offer advice and help you take proactive steps to minimise the risk of being left holding bad debts.

Struggling to Collect the Money You’re Owed? Contact Dynamic Commercial Collections

The expense and sensitive nature of medical treatments means that clinics often struggle to recover the money they are owed by patients. As much as you strive to provide a delicate touch when discussing money, your business needs to maintain its cash flow. Developing a relationship with a debt collection agency such as Dynamic Commercial Collections ensures you always have support for pursuing bad debts.

Our commercial debt collection services are available to all medical professionals, including doctors, dentists and veterinarians. We take an ethical approach to our field services and skip tracing services that maintains your reputation as a healthcare provider and avoids impacting relationships with patients. For more information you can contact us online to book an appointment with our team.
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