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HOW TO AVOID NON-RECOVERABLE DEBTS

This time, six steps that will be useful for you as a businessman in practical work with buyers (debtors) to prevent the situation when debts are not recoverable and become the object of your company’s corporate income tax.

1 Make contracts beneficial for you

Develop a form of contract acceptable to you and enter into written purchase and sale agreements with regular customers – regardless of other circumstances!

On a rainy day, they will help you understand the basic conditions of the transaction, namely, identify the transaction partner, record contact details, authorised persons, determine the structure of the transaction and, most importantly, the conditions for receiving money and penalties for late payments.

Motivate the buyer! Anticipate the conditions, if the buyer pays within 1-3 days after the transaction, give him at least a symbolic payment discount (usually 2-3%). This will greatly increase the buyer’s willingness to cooperate with you in larger volumes.

By the way, supermarkets that enjoy their position tend to charge 3% if you want to receive payment from them in less than 90 days. It also happens…

If there is a contract and there is a dispute with the buyer over the payment of the debt, any lawyer you hire to help recover the debt will be grateful to you.

2 Offer advance payment terms

When working with one-time buyers and customers, do not allow post-payment conditions! Always write an advance invoice before the transaction and wait for it to be paid, making sure yourself. Check your bank account before issuing a bill of lading for a product or service and issuing the product or service, respectively.

3 Remind about the payment deadline

As the payment deadline specified in the contract approaches, make sure that the sales manager sends a kind reminder to the buyer that the payment deadline is approaching – usually to the responsible person via SMS or e-mail.

4 Send words of gratitude

If the buyer has paid on time, make sure the sales manager sends him a true gratitude! This is especially important, at least at the beginning of the collaboration, because it creates a psychologically pleasant background and a sense that this buyer is valued.

5 Remind of the delay

If the buyer slightly delays the payment deadlines specified in the contract (usually 3-5 days), make sure that the sales manager sends a slightly more direct reminder to the buyer about the late payment, giving an additional 2-3 days to repay the debt without any penalties. This works because, as a result of such a reminder, such debtors usually pay their invoices immediately in 90% of cases.

6 Kindly threaten with collection

If none of the above methods of debt monitoring work and the delay is already more than a month, then consider cooperating with a collection company – preferably with one of the local ones, as they are more flexible in their approach. If the delay in payment lasts for more than 2 to 3 months, the chances of recovering such a debt are usually drastically reduced …

Businessman, please be responsible in working with your debtors! This will contribute to the sustainability of your business.

By the way … Understanding that the real power of businessmen is making deal, we offer our customers the monitoring of these debts as an additional service.

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