EFFECTIVE DEBT RECOVERY

This ethos is the basis upon which Schultz Incorporated was established in 2009 and remains a core driver for the practice from partnership level to support staff.

As a result of the company’s impeccable track record, it is currently the preferred law firm of a number of high-profile corporate clients. In respect of Legal Recoveries, it is the service provider for a number of Blue-Chip companies, as well as companies with smaller recovery books. The Company’s focus is on high volume and low-cost recovery – our clients provide us with bulk recoveries, and we emphasise expedient judgements and low-cost recovery.

It is just as important to manage your customer accounts effectively as it is to provide service to your customers.

Cash flow is integral to any business.

Often companies are reluctant to engage attorneys to recover their debts, as they either believe they can self-rehabilitate the customer by giving revised terms of payment, or alternatively they believe handing over a customer will result in them not retaining the customer.

Both these viewpoints, in our experience, have not been successful or lack merit. Customers will pay the creditors that create the most risk for the customer i.e. judgements etc., and customers will remain with a supplier because they appreciate their product or service and not leave if they are forced to make payment due.

The decision needs to be made without any external consideration and simply on company policy – the customer has been provided the credit allowed and failure to adhere to those parameters must result in certain steps being taken to recover the outstanding. The customer will respect your company policy if it is adhered to without deviation.

To ensure the back end (debt recovery) has a good prospect of success your front end must have integrity.

The front end should include the following aspects:

1. ITC checks should be done on all new accounts – should a customer’s ITC check show defaults or numerous directorships and changes in company status – that should create an immediate red flag
2. Ensure Credit agreements and Suretyships compliant with all potential customers – when trading with a CC or Pty – it is imperative that you obtain a suretyship as there is no obvious recourse in law should the PTY or cc be liquidated
3. The details provided by the customers should be verified and the email and physical addresses should be confirmed – attendance at the premises or google map view of the premises are beneficial should you have sales teams on the road in order to inspect premises.

The terms of payment provided to your customers are to be strictly adhered to – if a customer is one day late (if he hasn’t paid in the time provided, he is likely not going to pay)– a template letter should be provided advising that they have seven days to settle account failing which the default will be logged with the credit bureau and the matter will be handed to Attorneys for recovery.

In our experience customers respect a system that demands compliance on payment – and ensuring that the customer respects the terms of credit provided.

Should a customer, after receiving an internal letter advising of handover to attorneys within 7 days fail to make payment –  on the 8^th day the account must be provided to legal and process must be followed rapidly to judgement and execution by sheriff. The account must not be kept open and continued failed promises to pay and re-negotiations on terms until it has aged even further.

The management of your cash flow is dependent on the company ensuring accountability on timelines to the debtor.