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Tracking Pending Payments, Rights and Procedures
This is the down side of any business and the PDR industry is not immune to clients who simply do not pay their components. Typically, PDR companies set up in storm zones and begin to search around and gather work. Some companies may have contracts with insurance companies – others may have to set up and have clients come to them but also search for local panel shops who work with them.
From a payment perspective, insurance companies will pay once invoices are produced. They may have a specific time from paying the day after or within a week with preferred companies to a month or up to 6 months. But they do pay. Managers just require to be on top of accounts with payables being filter out and printed and chased up. They may also require to know the methods of payments such as emailed invoices, or in the odd case mailed invoices – yes snail mail ( the same company pays preferred PDR companies the next day after invoiced). There are however cases where because then PDR business is mobile, if the address supplied was from the previous storm, the. You will not get paid as the cheque may have been sent there often discarded by new new tenants of the workshop. To avoid this problem, always provide any insurance company with a permanent address – usually a PO Box for the mailing address at minimum.
Consumers consist of two types: insurance claimants and private job consumers. Insurance claimants only require to provide excess payments except of course where the insurance companies have decided to pay out the customer and it becomes a job between you and the customer (private job). And of course there are private jobs often referred to as cashiers and these jobs require to be paid fully. Private consumers very rarely require chasing up for payment unless trust has been used and the car given back with no payments. Nevertheless, the amounts that require payments are not excessive and detrimental to the PDR business operation’s cash flow.
Besides private consumers, most clients are going to be panel shops, fleets, auctions, and car yards as well as councils, mines and so on. The issues of non-payments mostly arising from private companies unfortunately tend to be mostly panel shops. Theoretically, this should not happen as the payment should have come through from insurance! Yet the clients use this money to top their own account and hang on as long as possible. In some cases they have spent the money and don’t have it. Delay tactics, excuses, non-answered phone calls, broken promises of paying next week, paying one payment at a time are all tactics used.
Systems in place to prevent or reduce debt
There are ways that PDR companies can avoid or at least reduce debts from sizing up to significant amount. A policy of payments being required to be paid perhaps monthly eg mid month. If payments are not paid, lee things being immediately arranged and if required work ceased until payments are made. A knowledge of insurance company payment procedures and can be an advantage in this process. It can also avoid causing unnecessary friction between both parties.
Procedures in chasing up debts
What can be done. Initially, courteous letters can be sent to as a reminder. Perhaps a month or so later. Another letter as a reminder. After perhaps a third letter, unless a compromise has been agreed, it may be required to change the format to a warning of passing the debt to a debt collecting agency with a paid by date specified. It depends on the client of course as usually this step almost always severs relationships. This may not be such a bad idea of course as usually if they refuse to pay once, they may have a history of the same with other clients.
Debt collecting agencies
The most regrettable stage but one that may be required is approaching a debt collecting agency. What needs to be considered here are sizeable amounts of debts with a client unless there is an agreement with the debt collecting agency to chase up any debt for whatever percentage. Before proceeding with debt collecting, please read through all the procedures, fine print and fee schedules as they can amount to a sizeable amount just lIke lawyers. The matter may require to go to court and this costs and of course usually at least part of the cost may require to be paid by the offending client – depending on the judgement on the day of the case.
Unlucky situations may arise where a company may be liquidated or be declared bankrupt. A solicitor as well as the appropriate government departments may provide advice on appropriate procedures.
Some Important Reading Before Using A Collection Agency
Some important reading (both articles are the same from two different Government departments). The concept of debt collecting came through in the media in last 2013 and some of the issues where intimidation tactics and threats being used by some debt collecting agencies. The choice is yours but be careful what systems the company uses to proceed including the concept of privacy.