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DEBT PREVENTION- WHAT IS IT AND WHY MIGHT I NEED IT?

Bad Debt

How can an attorney add value to my debt prevention?

It may seem odd that we are suggesting an attorney can add value to your debt prevention, but below are 5 reasons why you cannot have debt prevention without an attorney!

Why would an attorney be of any assistance to me before a debtor defaults?

Although it may not seem like the most obvious person to assist with in-house procedures, a debt collection attorney has years of experience working with corporations, dealing with bad debtors and understands the recurring patterns resulting in bad debt. Consequently, an attorney’s bird’s eye view of the behaviour of debtors both before defaulting and during the collection process gives him or her the ability to provide very useful insights to prevent debtors from defaulting.

What does the training of sales representatives entail?

An attorney can assist in the training of sales representatives on the drawing up of contracts for the business. The contracts are usually referred to as a credit application, client application or the like. Every clause of the contract must be understood by the sales representative and the consequence of each must be crystal clear to the person binding the company. Whom better to explain a legal document than the very person that is responsible for drafting that document!

I have an accounts lady, why is this not sufficient?

An accounting professional is trained in accounting principles, essential in any business. They are not professionally trained in dealing with debtors that do not want to pay. This is usually a debt collector or attorney’s forte. An attorney is able to train your accounting professional and equip them with a basic guideline and timeline for collecting payments in due course. They’re also able to script a professional and legally correct request for payment. Giving your accounting professional the confidence through a policy that he or she can literally follow the recipe to keep the debtors in good order and keep your business in a good place.

How would an attorney be of any assistance with my accounting practices?

Dealing with defaulting debtors teaches attorneys the way debtors usually act and therefore they’re able to often pre-empt such bad behaviour and prevent the debtor from defaulting. The assistance that your attorney can offer is managing debtors, especially insofar as not letting debt get too old. It is an absolute truth that a debt becomes harder to collect the longer it is left and therefore the focus must be one of pro-activity rather than re-activity.

Why do I need to vet potential clients? They have not defaulted yet!

Sadly, in business trust should be earned. New clients have the potential to be either fantastic clients or horrible clients, and sometimes it is possible to prevent the horrible client from passing the doorstep. Doing the necessary checks to ensure that the client is who they say they are and do what they say they do, may save a business a lot of money in the long run. In order to vet a client properly, you need to make sure that the person responsible has a clear policy of what such vetting entails.
In today’s world we need to apply modern measures to running a successful business. It is no longer economically viable to only deal with bad debtors once they have defaulted. Businesses need to make a conscious effort to prevent debtors to default in the first instance.

Please feel free to contact our offices for a consultation to discuss manners in which we can assist your business in preventing bad debt insofar as possible.

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