In these times of austerity, cut-backs and rising costs the amount of disposable income is less for many people.
The slow economy is putting a strain on businesses as well as consumers and the paying of bills is prioritised by what is essential and who is making the most noise.
This is the same for everybody and essentials such as the mortgage, food and electricity are clearly top priorities for homeowners and I found a helpful guide of ‘Priority Bills’ here: http://moneyaware.co.uk/2012/08/which-bills-should-i-pay-first/#more-3788 with a link to an ‘infographic’ (a picture with information) detailing the consequences of not paying these priority bills.
Losing your house is quite a big incentive and when faced with this as a consequence people tend to get motivated and do whatever they can to meet the payments.
Some people also bury their heads in the sand and hope the problem sorts itself out but my recent experience focuses on the former, more motivated kind of person (well, eventually!).
A company owner/director of a one man band working in the building industry had a bit of trouble getting motivated to pay his bills.
This went on for a while and a small, friendly business kept doing little bits of work for the company director without receiving monies owed.
Naturally this couldn’t go on forever but the service provided by the small business was not unique so the reluctant payer could easily up sticks and go elsewhere and although the small business could quite easily stop doing any further work there was no incentive for the bills to be settled.
One had to be created!
Now there’s often no need to ‘send the boys round’ at the first sign of trouble. It could be considered overkill when there’s a far more sensible approach.
As a point to note I am not familiar with any other systems or similar solutions so I don’t know if there is better or worse available.
CreditFocus was introduced to me through Barclays with whom I bank but don’t own shares in.
It is an online system that costs £10 per month (+VAT – which I found out after the first payment was taken!).
In my opinion it’s still worth it!
What you do is….. Once registered, sign in and create a record of clients. You can add them all or just the ones who are already a bit behind.
Then add the details of each outstanding invoice.
Then (and here comes the science) click a few buttons and hey presto, a letter is sent out to your client from a solicitor politely suggesting they pay their bills or face potential legal action.
7 days later that same solicitor gets in touch (by email) to ask if you’ve managed to recover the debt or if you’d like them to pursue it further (for a fee).
At no point do ‘the boys’ get called into action!
I found the first stage was a sufficient incentive for my reluctant payer.
A nice letter….
So far I’ve only had to use it once but since registering for the service I have recovered 36x the cost of the service!
All in all a very easy system to use and effective.
To be honest I actually send statements out to clients now with just a footnote mentioning that unpaid debts may be referred to a debt collection service and that has also worked on occasion!
Sometimes people just need a gentle shove in the direction of their wallets!