The Pros and Cons of Engaging A Debt Collector

When we chose to go with a debt collector, we received a lot of feedbacks that discouraged us from doing so. Basically, it was seen as a negative way of handling the situation.

From my own rationalization, these were the pros that outweigh the cons:

• The debt collectors help to remove some stress in chasing for the bad debt; they saved us time and money and gave us a peace of mind.

• They are experienced and have their ways to recover the bad debts which we were unable to do so. This third party involvement has proved very effective for us.

• They allow you to combine the bad debts and collect the total figure on your behalf. (this would prove useful is you have very small amounts of debts from other debtors that would be a time waster to chase after)

The reasons why others dissuaded us are listed below and my rationalization are in blue:

• They cost us money and it is not a guarantee that we would be able to recover our bad debts.
  
  • We had to pay a flat fee upfront and are charged a hefty commission on the amount of bad debt collected. I figured this was no big deal, I rather pay the debt collector to do his job than to give away my money to a dishonest business.
  • Doing business is all about weighing the risks and returns. Nothing is a guarantee and after accessing our situation, this was a risk well worth taking.

• There is a risk that the debt collectors may use unorthodox methods to recover the bad debts and we risk our reputation as such.
  
  • An indemnity form was signed and it states that we did not request for the debt collectors to use illegal ways to recover the bad debts.
  • Do select the right debt collectors to do the job; check on their ACRA status and communicate with them to understand more before engaging them.

In my next post, I'll share more with you about how we access that the debtor was insincere in repaying our debts and why we choose to use a debt collector instead of bringing them to the Small Claims Tribunal.

It's Tax Filing Time in Singapore

It's the time of the year to file for taxes again and I like to do it fast and get it out of my way.

I called up IRAS today and found out a few more things regarding e-filing for my partnership company.

Just for your info, especially if you are a new company that may not know these:

• Medisave contribution is compulsory for individuals who earned net income of $6,000 and above.
  
  • For eg. Profit is $10,000 and Partner A's share is 70%. Partner A will have to contribute to his Medisave but Partner B who is holding 30% doesn't have to.
  • The rates can be found here.

• Personal income tax filing (From B/B1) is required after you've filed Form P
  
  • This is even so if you've received the letter from IRAS informing that you do not need to file your personal income tax as it will automatically be done for you.

• Only Entertainment for Others falls under Allowable Business Expenses
  
  • Which means that food and drinks you buy for yourself is not allowable. Hmm... hard to split right?
  
  

A Brand New Brand

I love coming up with the overall branding direction of a product! I guess I truly enjoy this aspect of my business more than sales... It's fun, it's mind boggling and it's time to unleash my creativity!
Being your own boss means the new brand will be everything you want it to be, from the feel to the look, from the sound of its name to its target audience. It'll be your baby and it's satisfying when your brand gets recognize for its goodness.

Image taken from here

We will soon have a new product line and in the midst of this lazy and hazy afternoon, I shall churn my brain juice for some nice sounding names.

It's time for my brand new brand! =)

Someone Owe Me Money

Yes, it's happening again... Oh well...

And let me apologise for this week's infrequent posting before I start writing. I have been busy and a little lazy too. Will remind myself to stay discipline and be on track.

I was just speaking to a friend just now and we brought up the issue of people owing others money. It makes both parties uneasy and unhappy when one has to chase for payment, no matter how nicely it is done.

Yet, I have came across several debtors that have given me the attitude that I am wrong to ask for the money that is rightfully mine.

If you're one of those that behave as above, I urged you to stop doing so. Just stop to think how it'll feel if your boss holds back you salary even for a few days.

No matter what's the reason, do remember that most of us do not like to chase for payment too. It's simply something that's so vital to a small business owner that we just have to do.

When To Recover Bad Debts Through The Small Claims Tribunal?

Besides fulfilling the criteria listed in my earlier post, I have accessed my situation by considering these factors:

• Whether the company will still be in business 6 months after I file my claim
  
  • Reason being that if the company closes down within 6 months, it may be harder to reach the respondent (debtor).
  • Also, by that by the time action is being taken, they may not have much assets left for me to seize since they are no longer in business.

• Whether the company has assets worth seizing
  
  • For eg., my debtor was a retail company without valuable asset. Even with the writ of seizure, there may not be much valuable asset for me to seize.

The above is my own personal decision making process and it may not be the best course of action for your business.

Do think through and access your own situation thoroughly before taking any actions.

And if there's any other considerations or important points to note, I hope others out there will share and post their comments so that we can help one another out. Thank you!