It seems even local charities have to resort to some tough measures at times.
After pursuing late payers for the past year, Endeavour Industries is considering the appointment of a debt collection agency to chase businesses that refuse to pay their bills on time.
A statement from the Chair of the Board of Endeavour Industries Geoff Kettle said the decision was made as senior managers of the charity were spending too much time on the problem.
Mr Kettle said when the problem of bad debts was identified last year, Endeavour’s managers made personal approaches to debtors asking to pay up. In some cases, the amount ran into the thousands of dollars.
“Among those we chased were some big-name franchises,” Mr Kettle said.
Endeavour has tightened up its credit terms, informing all its customers before Christmas that terms were now strictly 30 days.
“Most of our customers understand that we are an organisation that employs some of the most vulnerable people in our community. While the majority pay on time, some seem to have no shame about exploiting them,” Mr Kettle said.
Endeavour’s General Manager Sonya White has drawn up a list of potential debt collection agencies and is expected to soon finalise the new arrangements.
Mr Kettle said those owing monies have debts extending beyond 120 days and have refused to pay up despite many calls to their premises.
“While debt collection agencies take a percentage of monies recovered, we take the view that recovering a percentage of something is better than recovering nothing at all,” Mr Kettle said.
Ironically, late payments in the general economy are at a record low.
A late payment analysis by illion – formerly Dun & Bradstreet - noted that many businesses are cash rich because of record low interest rates and low wage growth, even if the average level of firms’ selling prices remains contained.
“It is noteworthy that the decline in late payments in recent years reflects broadly the decline in interest rates over those years,” illion stated.