Unfortunately there is no hard and fast rule.  In some cases, such as if the debtor has refused to pay or if you do not want to wait for your money, you could refer the debt immediately when it is 1 day overdue.  In most cases though, once a debt reaches 90 days overdue or more, you should be treating the account with extreme caution and consider engaging a debt collector.

Telephone calls work best!  Call the debtor and ask for payment – find out why it hasn’t been paid and when you can expect payment (ask for a date).  A debtor who is genuine about paying will respond to your call.  It is also helpful to send an email or letter to the debtor, giving a clear deadline (date and time) of when you want you want full payment.  Let them know that failure to pay will give you no option but to refer the debt to a debt collector.

It is often a difficult decision to make.  One view is to ask yourself the value of that customer’s business if the customer is not paying you?  On the other hand, the customer could genuinely be experiencing a temporary cash flow issue and will again become a star customer.  We recommend speaking openly with the customer, find out the problem and let them know that your business cannot afford to carry them.  If you decide that you need our assistance, contact us, explain the situation and we could take a very gentle approach with the client and hopefully give them the bump they need to pay you without damaging your important business relationship.

You can only pursue the directors if they have signed a personal guarantee.

You can put a caveat on the property if you have a caveatable interest which is usually in the written contract that you entered with the debtor before giving the debtor credit.