Debt is money one party owes another. Individuals or companies will find themselves incurring a debt at one time or another. This is because debt gives you an opportunity to purchase goods or services which, at that time, you are not able to afford for one reason or another.
Debt is normally finalized with agreements of repayment at specified times. A bad debt arises when the borrower fails to honor the repayment agreement. As a measure against bad debt, these five basic tips can be your guide.
Before you can entrust your money with any of your customers, a survey of their credit worthiness will pay off greatly in due course. Among the terms you should set clearly, proof of clearance or a credit report from an accredited Singapore credit bureau by the customer should presented. This credit report should show you the history of your client. If they have been black listed by any bank or organization, then they should not stand a chance with your money.
Setting a clear amount of debt you are willing to risk with your customers helps you as the creditor to reduce chances of bad debts and gives you more time for other customers. The credit agencies in Singapore are able to show you the payment attitude your client has towards debt. This payment habit can be used by your firm in determining how much credit, if any, to give to your potential bad debtor.
Any agreement you make with your client regarding the debt or loan and its repayment should be done in writing. This is important for both parties as proof that money was exchanged between the two parties. The agreement should also stipulate clearly fees – if any – that will be paid in case of delayed payment, which ought to make the debtor want to pay early.
After you finally sign the debt agreement, do not forget to send invoices as a reminder to your client before the set due date. This will help the client to stay focused, especially if the amounts due are high.
The due date is finally here, you have been sending reminders to your client and no sign of repayment is forthcoming. Do not take chances, and do not buy more time with the hope that repayment will be smooth. This will be a good time to contract debt recovery services of a licensed Singapore debt collector, who will help you get your money back as the law allows.