How to Get Paid - Fast
Debtor Management for Small to Medium Sized Businesses
Turner Hopkins has recently developed a Debtor Management System for small to medium sized New Zealand businesses, which is designed to assist in the collection of debts in a highly cost effective and timely manner.
The processes we have developed can be broken down into three modules:
• The first module relates to ensuring the terms and conditions of trade (in other words the contract between our client and the debtor) is in the most up-to-date and appropriate form. A comprehensive term of trade agreement should provide for the following:
a) Guarantees by directors where the party obtaining credit is a company;
b) Personal Property Security Act registration in favour of the supplier;
c) Supply authority to the supplier to obtain credit references and list defaults through a credit reporting agency;
d) Allow the creditor to recover collection costs as well as legal costs and disbursements reasonably incurred in the case of a default.
We find that we are often able to quickly review our clients' existing terms of trade and supply appropriate amendments and suggested improvements at a very modest cost.
• The second component offers a fixed-fee follow up service, whereby a polite letter of demand is written to the debtor, and two follow-up phone calls are made. We then keep our client advised as to progress of the matter by email.
• Finally, we are able to commence legal action against a debtor for a fixed fee and in circumstances where a significant portion of the costs incurred can be recovered upon settlement. The legal process will need to be considered in each individual case and will depend on whether or not the debtor is a company or individual. Our clients are constantly and pleasantly surprised at the low costs at which we are able to commence legal proceedings.
In the current economic environment it is essential for business cashflow and liquidity to ensure that debt management systems are as efficient as possible.
We have a more detailed outline of these services available on our website (www.turnerhopkins.co.nz). Alternatively, we have prepared a brochure outlining our debtor management system. If you would like a copy of the brochure, please do not hesitate to call.
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