Prevention is better than cure – Avoid running after debtors
Healthy business relationships are built on trust, and trust is earned. One might consider a person trustworthy as a result of their being a long-standing acquaintance, their perceived friendliness, or their appearance as an honourable person. This perceived trustworthiness is unfortunately not always manifested. More often than not trust is broken by the last person one would expect.
When it comes to debtors’ control, the old saying that prevention is better than cure rings true.
Whether debt finds its origin in the service industry or in sales, there are steps creditors can take to avoid situations where they are forced to run after debtors. Some of the steps are as follows:
Step 1 – Contract is Everything
Firstly, and most importantly, always endeavour to have a written contract. The contract must be clear, unambiguous, and clearly understood by all parties involved. Devious intent thrives on uncertainty.
Step 2 – Avoid Out of Sight and Out of Mind
Do not be afraid to remind your debtor of the fact that they owe you money and that you expect payment by a specified date. The longer a debt is allowed to remain outstanding, the lower the prospect of a recovery being made.
Step 3 – Keep Records
Time erases all, including the memory of facts surrounding a transaction. Ensure that proper records are kept of all telephone calls, letters, and meetings, as this will greatly improve the prospects of success if a matter proceeds before Court
Click here to see some of the pitfalls which may await you in the event that a debtor fails to perform in terms of an agreement.