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Thread: Bad debtors

  1. #1
    Join Date
    Jan 2007
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    North Canterbury to UK
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    Default Bad debtors

    Been running my own lawn mowing and garden business here in Christchurch and surrounds for 4 years now.

    In that time I've only had one customer who has totally defaulted so not so bad . Recently though I have noticed a trend for folks to be a little late with their payments , indeed in the middle of Dec I was owed some $2,700, from some bigger tidy ups that I'd done. Thankfully all that came in eventually but took some phone calls and e-mails to give folks a nudge.

    A lot of my jobs are done on trust, trust that once having done the work I'll get paid. I sometimes never actually meet the customer as it might be a rental they need tidying so it can be hard to gauge if they're going to be a bad payer or not.

    I was talking to a builder the other day and he says lot of firms have pushed out their settlements to 72 days rather than the 30 of old. It is my commercial clients that are the worst payers

    So what I'm saying to those who are thinking of embarking in a small business venture is ensure you've policy for late payments in place abd that your customers/clients are aware of it from the start, saves a lot of stress later on (and phone calls texts etc )

    On the plus side I have some customers that are an absolute delight, always pay up front or by the time I've got home

  2. #2
    Join Date
    Jun 2010
    Location
    Ōtepoti, Aotearoa
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    2,736

    Default

    You aren't dealing with territorial (governmental) authorities are you? Lucky you!

    On a serious note this is just one sign of our general economic predicament!

  3. #3
    Join Date
    Jan 2007
    Location
    Chch, NZ
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    2,213

    Default

    Actually in our business, we've found gov't (municipal) to be very good payers.

    Our line of business is wholesale souvenir giftware so we only deal with retail store outlets. With about 20 years of experience in this area, we've found that there is no golden rule when it comes to knowing good or bad debts. However i'll elaborate some experience.

    Overall large amounts tend to have a higher chance of default. Sometimes you get a small partial payment and then they disappear or they just can't make any payment.

    Without being racist, Maori and Islander migrants have a poor outcome - maybe 1 in 10 work out extremely well and maybe 3 out of 10 give some sort of payment. Overseas migrants from Asia can be quite difficult too. I've found S. Koreans overall to have a habit of being slack on making any payment. Some asian shop owners outright lie in the terms of the invoice agreement. But as anything, there are exceptions.

    Large corporations can be difficult to determine. Some of our biggest debtors were large Maori corporations while some of our biggest accounts in perfect standing are large corporations operated by overseas migrants.

    So as I say, there is no general golden rule. It would be nice if there's a nationwide database where business owners can lodge bad debts from other people, but under NZ Privacy Act - a person's financial details can not be disclosed to the public. Quite often shops load up and close up and re-open under their extended family name.
    Baycorp collection agencies have very little power in extracting $ for anyone. Which is why the NZ tax dept doesn't rely on it.

  4. #4
    Join Date
    Jul 2012
    Location
    UK
    Posts
    19

    Default Any Advice would be welcome

    Quote Originally Posted by benandclare View Post
    Been running my own lawn mowing and garden business here in Christchurch and surrounds for 4 years now.

    In that time I've only had one customer who has totally defaulted so not so bad . Recently though I have noticed a trend for folks to be a little late with their payments , indeed in the middle of Dec I was owed some $2,700, from some bigger tidy ups that I'd done. Thankfully all that came in eventually but took some phone calls and e-mails to give folks a nudge.

    A lot of my jobs are done on trust, trust that once having done the work I'll get paid. I sometimes never actually meet the customer as it might be a rental they need tidying so it can be hard to gauge if they're going to be a bad payer or not.

    I was talking to a builder the other day and he says lot of firms have pushed out their settlements to 72 days rather than the 30 of old. It is my commercial clients that are the worst payers

    So what I'm saying to those who are thinking of embarking in a small business venture is ensure you've policy for late payments in place abd that your customers/clients are aware of it from the start, saves a lot of stress later on (and phone calls texts etc )

    On the plus side I have some customers that are an absolute delight, always pay up front or by the time I've got home


    Hi
    Have been doing lot of research on Forums as my I will be coming over with my husband in March 2013 as we have been accepted on my husbands LTBV, he runs a landscaping business her in UK and will be doing the same over in NZ, hopefully around Auckland. We have been looking in the areas of Rodney, Massey, Army Bay. Do you know anything about these areas to live and work in? Could you recommend a GOOD accountant, as this will be one of the first things we want to sort (along with house) once we get over there? What are prices like for tools in the landscaping/mowing game over in NZ or would you recommend we kit up from UK and bring it over?

    Have been trawling the forums looking for someone in similar position to us, with same visa type and business. Sorry for all the questions, have so many more if you don't mind.

    Thanks
    Mirrors

  5. #5
    Join Date
    Jan 2007
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    North Canterbury to UK
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    2,755

    Default

    Hi welcome along Mirrors

    Don't know about the areas in Auckland as I'm down here in Christchurch, if you put up a thread on the main forum you should get some answers.
    I use http://sba.co.nz/ , they are very good and only charge me $300 per annum although I'm part time so suspect you may have to pay more for full time. tax laws etc etc seem a lot easier here in NZ than back in UK. I'm not GST rego'd but you may well want to be.
    If you've decent hand tools I'd be included to bring them over. As for the powered ones , not sure. yes you'd probably be able to buy cheaper back in UK but I'd worry about spares if they are not readily available in NZ. A good internet search should give you some answers. I've all Stihl stuff here which I've bought here apart from my chainsaw which is 15 years old now !!

  6. #6
    Join Date
    Feb 2008
    Posts
    35,997

    Default

    mirrors, hello and welcome.

  7. #7
    Join Date
    Apr 2008
    Location
    Waimauku near Auckland
    Posts
    502

    Default

    Quote Originally Posted by Mirrors View Post
    ... landscaping business... Auckland... areas of Rodney... Do you know anything about these areas to live and work in?
    Back in the UK and for nearly twenty years we had a chap who cut the grass and kept the garden tidy every two weeks. We simply left the money in an upturned flowerpot.

    When we moved to Waimauku last year we couldn't find anyone to mown the lawn and it looked like I would have to do this myself! Fortunately we soon found a chap who does a similar job but leaves an invoice.

    The other difference being that the kiwi has a van with a couple of mowers of various sizes to cater for different jobs while in the UK the chap used his own car!

    Plenty of large gardens locally but most people seem to sort out their own lawns.

    Good luck with your move.

  8. #8
    Join Date
    Jul 2012
    Location
    UK
    Posts
    19

    Thumbs up

    Quote Originally Posted by rogercruse View Post
    Back in the UK and for nearly twenty years we had a chap who cut the grass and kept the garden tidy every two weeks. We simply left the money in an upturned flowerpot.

    When we moved to Waimauku last year we couldn't find anyone to mown the lawn and it looked like I would have to do this myself! Fortunately we soon found a chap who does a similar job but leaves an invoice.

    The other difference being that the kiwi has a van with a couple of mowers of various sizes to cater for different jobs while in the UK the chap used his own car!

    Plenty of large gardens locally but most people seem to sort out their own lawns.

    Good luck with your move.
    Thanks all for your advice and good wishes. my OH usually invoices customers, has various tools/mowers and work ranges from garden tidy/mowing through to full design and landscape. Looking at google earth etc there seems to be a lot of decking out there, also loads of concrete drives rather than block paving etc, does anyone know why? Is it the expense of the supplies or just preference do you think?

    We hoping to come out in March 2013, so still doing lots of research. Houses seem more expensive that UK but a lot have more land around them which looks great. Have read about the leaky homes too.

    Please keep the advice coming as it is very very welcome. Thanks again for your replies

  9. #9
    Join Date
    Jul 2012
    Location
    UK
    Posts
    19

    Default

    Hi Rogercruse,
    Thanks for reply.
    what part of UK are you from? We are Preston, Lancashire. How did you find the move over to NZ?

  10. #10
    Join Date
    Jul 2012
    Location
    UK
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    19

    Default

    Thank you

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