Every business owner, at some point, faces a client who just won’t pay on time or at all. But what exactly is debt collection, and how does it work in New Zealand? If you're unsure how to manage overdue accounts, this simple guide is for you.
What is Debt Collection?
Debt collection is the process of pursuing payments on outstanding invoices that have gone unpaid past their due date. It involves reminding, requesting, and if necessary, escalating the situation to recover the money owed.
In New Zealand, this process can be managed in-house, outsourced to a debt collection agency, or automated using modern debt recovery software like iCollect.
Why Do Businesses Need Debt Collection?
Late payments are one of the leading causes of cash flow issues for small and medium-sized businesses. Without a reliable system for following up unpaid invoices, your business risks losing not just money but time, reputation, and future opportunities.
Debt collection helps you:
- Recover money you’ve earned
- Maintain predictable cash flow
- Set professional boundaries with clients
- Reduce financial stress on your team
The Typical Debt Collection Process in NZ
Here’s how the process usually works:
Initial Reminder: Email or phone call after the due date passes.
Formal Letter of Demand: A professional request for payment, often with a firm deadline.
Collection Agency Involvement: If the debtor remains unresponsive, an agency like iCollect steps in—professionally and legally.
Tribunal or Legal Action (if required): For more complex or high-value disputes, legal intervention may be necessary.
With platforms like iCollect, you can handle steps 1–3 automatically, minimising effort while maximising results.
How iCollect Makes It Easier
iCollect is a purpose-built debt collection platform for Kiwi businesses. It automates debt collection agency letters at the tip of your fingers. iCollect provides a low-cost, high-impact recovery process.
Key benefits include:
? Easy Xero integration
? Transparent pricing
? 24/7 tracking and reporting
? No commission-based surprises
Final Thoughts
Debt collection is about being consistent and proactive. With the right tools and approach, you can get paid.
