Debt Collection - Collected Wisdom
Most Milk Round Software users have problems with collecting money. Here are a few words of wisdom from your fellow users. More contributions with copies of demands for payment would be appreciated.
September 2017 - Change in Pre-Actions Required before taking action against debtors. Pre Action Protocol
Milk Round Software has integrated a connection to GoCardless Direct Debting offering the lowest cost Direct Debiting service.
Direct Debiting significantly improves cash flow!
But what about keeping the personal contact with your customer? DD is of particular use for those customers who are never in, or only pay once every few months or more. With our new system you can make a "pay-off" arrangement where a big debt can be paid off at say £30.00 per month after which the actual amount owning is collected.
It is very low cost - it costs a £10 to collect £800. You get paid within 7 days of posting the direct debits via the internet.
If you need help please call Steve.
We have erradicated 98% of our debt.
We check the list, everybody over 6 weeks recieves a stamped adressed envelope through their letter box with their current Invoice. If no joy we follow up with a letter as well (attached).
It worked well for us but you have be persistant! It took about 4 months to get where we are now but well worth the effort.
Customer address _________________________________________________
I’m sorry I keep missing you so I’ve left you your bill and a stamped addressed envelope. Please write you’re A/c number on the back of your cheque,[ you will find it above your address on your bill ] and then post it on to me. If you have any query with your bill please ring me on the above phone number.
You now owe, up till last Saturday ____________________
Collectors name ________________
P.S. If you wish, the whole of this bill need not be paid all at once You can pay whatever you want to and we will update your bill at the beginning of every month. Our computer has now been programmed to produce a bill automatically when any customer’s bill rises above £20. This will eradicate the problems we’ve had in the past with bill’s getting to large.
I would like to add the following ideas & suggestions:-
Be in control of your bills
Getting back what you are owed:-
This way you force them to write a cheque there and then and to post it off. If indeed after 3 days you hear nothing you MUST phone back to enquire where the money is. Failure to do this will invalidate the whole process.
Persistent offenders are dealt with in the following way:-
Here are some basic rules:-
When it gets to the state where it looks like they aren't going to pay then:-
The above was from my personal experience.
A MRS user asked for an upgrade to the MR8_for_Win. He came to my house and gave me a cheque for just over £205 which bounced (several times - a good idea since banks charge heavily for bounced cheques). No result - so I took it to court (In Huddersfield) - I attended the court he did not, and charged him £50 for the privilege. I Got a court order - which due to inexperience I did not enforce. Six months past. Then the cheeky b*****d applied to have the court order removed from the records. Again, I attended the court he did not, and charged him £50 for the privilege. I then enforced the judgement at a further cost of £75 (I think). In the end he paid about £450 for the privilege! Victory was sweet. I couple of years ago he wanted help with his system! I declined.
No magic answers on the bad debts – but read on;
I have 1878 active calls – 1338 of these are monthly billed accounts, 117 are weekly billed accounts and 13 are billed restaurants. Some high accounts are ‘normal’ for my business but some are a worry.
I tend to find that my debtors are and always have run very high – every now and again I run a ‘Top 100’ debtors report off – this helps me to a degree and brings my attention to any slow payers – however, even armed with this information – I then have to act and writing a ‘nice’ letter to ask for payment seems to get waylaid in the normal office admin.
As a thought for the MRS system – a facility to merge a customers address with their account totals with say 1 of 4 differing standardised letters of varying degrees of ‘demand’ would help – I know that I often say to my lads that I will draft a letter (even a nice one) to the customer, but as aforesaid I never really seem to get around to it (NOTE FROM STEVE - If someone would like to draft a letter I will include it in the system).
Some customers need a gently reminder, others a stronger one, some just take the ‘piss’ and should be stopped, others have stopped and then seem to ignore the repeated bills I send them.
You have hit on a good topic here – and one that I would genuinely appreciate help and advice with.
I am afraid to say that i am one of those who is carrying a lot of debt..
Over the last couple of months we have opted to do the following with customers.
I have changed collection days from the usual as i have found that when customers know you are collecting the dodgy ones dissapear to the pub or just dont answer the door, so on some accounts i collect just behind the postman in the morning..seems to work.
On the really dodgy ones who just do not want to pay I put them out to credit collections uk at the cost of £10 per letter, i have no idea what they put in the letter but out of 4 letters sent last week 3 have paid accounts straight off the other has made arrangements to pay...after this accounts stay on stop as it just isn't worth the aggro.. (I only use this service on accounts over £40).
With new customers wanting to start a delivery service i get them to pay £20 upfront and then weekly after that, if they refuse to do this you know that they are not going to be good payers....amazingly enough I seem to keep 8 out of 10 new customers doing it this way..
If you get a rubber cheque represent it. "Refer to Drawer" please do not
represent, does not mean you cannot.. HSBC only charge you £4
but the customer can get hit for £25 to £55. He will ring you if you keep sending it in !!!
I only had to do this once in over 20 years to a doorstep customer and that was after
telling him it bounced the first time the responce was it was a bank error and it would
clear 2nd time (he never paid by cheque again always cash on time).
With restaurants/ pubs I have been known to go for a meal with friends and knock off my bill at the end of the night when the place is full of the customers. Yes, you may lose one but if you are not getting paid do you want them at all? That's a 100% loss! Also, letting it slip to butchers and other suppliers what you know, works well!