I know most of you may turn your noses up at this post but please read on and I will give you the insight on what happens behind the scene's when bills aren't paid.
We have all been in the situation where we haven't paid a bill on time and a letter gets sent asking for money NOW or.......we will send you another letter in a more demanding way, don't pay that one and we will send a letter this time.....with BOLD LETTERS and if you don't pay us again we will send you a letter this time in BOLD LETTERS and a big RED BANNER!!!!!
Finally it sends a letter with all of the above and a threat of court proceedings.
All payments and activity's have a dedicated diary section in which notes are kept, this diary section starts from your account being opened and lasts until the account ceases trading.
I will put a damage rating (out of five) next to each stage and explain what it does if you go through each step of not paying.
The stages:-
So lets start with your account being opened, rule of thumb you will get 30 days credit and when the 30 days are up you need to pay your bill, you will get a little bit of a cushion period (maybe a week) before a call is made from the merchants credit control if you don't pay and they will inform you that it's due and how and when your going to pay.
Damage rating:- X
The company and credit control understand that sometimes its not possible to pay on time but it will state you paid late on your diary notes, it won't worry them but it will state you paid late on this occasion.
7-14 days, So you have forgot to pay after a weeks grace and credit control have called and you haven't stuck to the date you were going to pay, a letter will be sent and another call will be made asking for a new date, this sometimes means that your account will be put on stop although its down to the credit controller and your history so far on the account, this period runs from 7-14 days without payment.
Damage rating:- XXx
Starting to become a little more serious and the small "x" is a half rating because it depends on your history so far, if its a genuine reason that you can't pay then its excepted, if you just keep forgetting they will REMIND you by just putting your account on stop.
14 days - 1 month, It means that your account will definitely be on stop with a call made every other day from credit control asking for the circumstances and if you wanted to look at part payment (this wont get you off stop but something is better than nothing in there eyes) again diary notes start to fill your account on every call made, what was said and why payment hasn't been received, a letter will be warning of court proceedings but informing you that if you make payment it won't come to that.
Damage rating:-XXXX
This will really damage your account to a point where they may think about putting your account on a "prompt stop" meaning not even a days grace, if your account is due for payment and it goes a day over then it instantly goes on stop until you pay, it takes a while to come back from this and its a case of the company wanting to trade with you but your leash has become very tight in terms of trust.
A Month - Onwards, your account will be on stop and depending at what point your paying (The longer you leave it the worse it gets) a payment towards your account might still not be able to get it trading, letters will state that the debt has been passed to the legal team to retrieve the money and a phone call will come almost daily from the legal team to chase the money.
Damage rating:-XXXXX
At this point not only will the account be passed to the company's legal team but this will effect your credit rating, even if your account does get paid and your able to start trading again, the trust will be non existent, your credit limit will no doubt be decreased and it will have a prompt stop attached to it, the only way to gain trust again at this point is to never go on stop again for the next
6 months - 12 months and if you get close to your credit limit pay an interim to bring it back down.
To summarise this post isn't a scare tactic to get your bills paid on time (although its a pain in the backside if you don't) its to inform and help you, if you hit the later stages of what i have discussed and you have a large job come up what do think your supplier is going to say when you ask for a credit increase to get the materials? It sounds silly but the diary will look similar to this:-
01/01/13:- account opened, letter sent to customer informing of this and a 5k limit.
05/02/13:- over due £3510, called customer, is going to pay in branch tomorrow.
10/02/13:- called customer asking for payment, cheque sent to us in the post.
15/02/13:- no cheque received, account put on hold, spoke to customer and asked for him to cancel the cheque and drop a new one into the branch, informed he will do it Monday.
17/02/13:- no cheque, customer not answering mobile, left message, letter sent.
24/02/13:- no answer on mobile, letter sent.
literally every detail is logged of all the activity but this gives you an indication of what happens and Carry's on this way, if you keep your nose clean then it will give you a much better chance of a credit increase.
The other thing i want to mention to finish off is communicate with credit control, DON'T LIE! if your having money trouble then tell them, they are human and you maybe able to keep your account trading until you can get the funds together, if you lie to them and they suspect it they will put your account on stop, it isn't a machine that makes these decisions its a human and although they have to follow rules there are times that they can bend them to help you out of a difficult circumstance.
As usual you have my details for FaceBook and there's always Gmail if you wish to contact me privately but if you need help or advice concerning this or anything building related then please get in contact.
Save Build.
No comments:
Post a Comment