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

The cost and sensitive nature of medical treatments means that clinics and healthcare providers often struggle to recover overdue payments. While you may try to handle these conversations gently, your business still needs to protect its cash flow.

Partnering with a debt collection agency such as Dynamic Commercial Collections ensures you always have professional support. With offices in Brisbane, Perth and Bundaberg, we assist medical professionals across Australia, including doctors, dentists and veterinarians.

We take an ethical approach to debt collection, field services and skip tracing to help you recover outstanding debts while maintaining your reputation and patient relationships. For more information, contact us online to book an appointment with our team.

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, with offices in Brisbane, Perth and Bundaberg, ensures you always have support for pursuing bad debts across Australia.