In this case study, we help you get a clearer view of debt prevention and how an attorney can help you minimize your exposure to bad debtors.
I have very recently helped a company that had way too many bad debtors bring the bad debt under control using Vermeulen Attorneys’ innovative and novel methods that we have termed “Debt Prevention”
The company that I assisted was an attorney’s firm, which is quite ironic since attorneys have the skill and know-how to sue their own debtors. Why would bad debts spiral out of control? Simply because, as business owners, we are focussing on doing work for paying clients, not chasing delinquent debtors. Chasing these outstanding debtors not only takes time but for most business owners also means a financial output in attorney fees.
So back to my client, their bad debt was spiralling, and no one was paying it any real attention. Having intervened and instituted a debtor’s policy has decreased debtors becoming more than 30 days overdue on accounts by 80%. Handover to bad debt where litigation was necessary has decreased by 90%. The client is saving time and making more money. The system is in place and is followed without much effort or disruption. In short, everyone is happy.
So how does an attorney assist a company in preventing bad debt?
As an attorney dealing with bad debt all the time, I can also recognise the recurring patterns that cause debtors books to spiral out of control. We have identified four major issues that companies have internally, being contracts, vetting, training and debtors management. These issues are for the greater part legal issues, which is why an attorney is an ideal person to intervene and assist in rectification of current processes.
I love to say to clients that, “the creditor that makes the least noise is paid last”. Don’t be that creditor. Be pro-active and make sure that your company is not a victim of unpaid debts!