A healthy cash flow is a major requirement when running a small business successfully. So, when past due customer accounts receivables start piling up, it’s not something that can be lightly set aside. Those overdue bills can seriously compromise a business’ access to working capital and ultimately put the entire business in danger.
However, small business enterprises are normally at a disadvantage when it comes to debt collection compared to their bigger corporate counterparts who have the resources to employ dedicated, trained debt collection departments. Typically within smaller companies, the role of “debt collector” either falls to the designated bookkeeper or to some other “lucky” worker who is already juggling several roles and who has limited debt collection training, savvy, or know-how.
The company’s ability to debt collection is one of the most important factors that will determine its success. Hence, you need to have high level of knowledge and preparation with which you approach those efforts in the first place.
Since some entrepreneurs assumed the collection agency would be the cheaper way to go, many of them hire lawyers only after their collection agency failed to deliver results. But the truth is the debt collection process can often be complicated and drawn out.
For more on debt recovery procedure in Australia, check this out: http://www.business.vic.gov.au/money-profit-and-accounting/getting-paid-on-time/debt-collection-guidelines-and-recovery