Doug Constable – Transcript

Interview with Doug Constable

Interviewer: My guest today is Doug Constable. Doug is a professional, and has been in the business of helping clients, who are in insolvency issues, and has worked in the industry a long time. He happens to be the author too of a book, that’s about to be launched called How to Not Pay Your Debts, which is a curious title. So Doug tell me about how you have got into this business, and what you’re doing?

Doug: Thanks Morris. I got into this business really by default. I was doing business coaching and accounting for a number of businesses, and discovered that in the time I spent with them. The majority of them needed to be liquidated or re-worked, and quite often the directors had guarantees. They hadn’t been able to manage their business adequately, to make it profitable. So that’s really how I got into it.

Interviewer: So Doug, I guess a lot of your clients to be blunt, are facing bankruptcy.

Doug: Yes a lot of them have signed guarantees; personal guarantees, whether it be for leases or goods, and really their only alternative is to go down the bankruptcy part; which creates a problem, and a stress, for them and their families.

Interviewer: So Doug, I’m trying to stretch my mind, and wonder how one would find you. How do you normally get clients coming to you? In other words, if a client goes down the path of insolvency, he’s usually dealing with insolvency people from the other side, lawyers and accountants. So how does your typical client come to you?

Doug: Well a majority of my clients come to me from referrals, from accountants, bookkeepers, solicitors. I think certainly and it’s interesting today, that we’re talking about bookkeepers, it is they who probably realize earlier than most people that a business is struggling.

Interviewer: Yes. What do you think in terms of the small business sector? What do you think are the kind of key reasons why companies, or business owners fail – and we’re talking about business owners and their personal insolvency here too, aren’t we?

Doug: Yes

Interviewer: So what are the main factors that you see in your experience, that trigger this scenario?

Doug: Certainly in small businesses, I think one of the mistakes I see quite often, is that the small business owner thinks he’s saving money; probably he’s saving a small amount. But saving money by doing things like the books for himself and taking short cut in the management of the business. As opposed to spend the time, to have somebody outside do that type of work, and he gets on and does what he’s good at. He tries to do what he’s good at, and then fit the rest in somewhere.

Interviewer: Yes. And this is so typical, isn’t it? A small business owner tries to do pretty much all the jobs. But really, when you think about all the jobs, he’s probably only good at one or two things. Very, very few business owners, are good at managing the books either, are they?

Doug: And basically that’s the case. What I find in a lot of them is they’ve got a, these days Xero or Quickbooks online, or they’ve got some Accounting software package. What really just happens with that is, that more often or not, they come home for the night and not finish their job. They just do the invoices, and think oh yes, I’ll do the bank reconciliation, and I’ll do the rest of those later, and the GST later, and it really never gets done.

Interviewer: Yes

Doug: And consequently they don’t really know how their business is struggling, profit wise. They don’t use the reports or anything like that.

Interviewer: Yes. So I think one of the things you say to me before this podcast, is that you take the view that if a business owner is well, probably in over his head. The debt levels have got too high. He or she put off paying their GST obligation too long, and eventually a creditor is going to put their hand up and go for it. I think to use your words, but you can tell us now. The sooner the better, to take some action.

Doug: And that’s one of the reasons, why I think it’s important to have proper records, and really know where your business is at. Because what happens is, you start to get into trouble in business, and then you start spending a lot of time, either chasing people for money or talking to creditors. That really just destroys your attitude and that entrepreneurship, if you like, started you in business in the first place. It all becomes a chore, and then you start arguing with your wife. The whole thing just blows out.

So really the professionals that you deal with, whether it be your accountant, your bookkeeper, your lawyer, whoever, really needs to be very conscious of advising you, as early as they can.

Interviewer: Yes.

Doug: The longer it lingers, is the worst it gets.

Interviewer: Yes. I think one of the things that piqued my interest in talking to you, was there is a kind of prejudice here in Australia, at least. Not so much in the USA, of people going for bankruptcy. They see it as failure, and you’ve got some pretty strong views about that, haven’t you?

Doug: Yes. From what I see, the strong prejudice is there, really with people that haven’t been paid. So we all like to do work, we all like to get paid, but really it’s up to us, whether we choose to do the work. There is a lot of responsibility on the person that has got the goods, or the service to pay. But we seem to avoid the responsibility, on the person who is providing the credit. My view is, it is a two way street and the person needs to pay his responsible, and the person that wants to be paid is responsible. So this stigma is really isn’t there, it’s just your own mindset. We accept this responsibility, and we’re told we should do it. But if things don’t work out, we really need to say. Well, alright our family and our responsibility to ourselves are first. I’ve got many examples of people that they handled that quickly, and made the hard decision to either close the business, or restart it. Their life would have worked out a lot better for them. In some cases they would have remained married. In other cases, they would have kept their house.

Interviewer: Yes.

Doug: One of the things I see, time and time again. Is where people take their personal assets, which is their house which they build up over years, and put up with their family; they take their personal asset to prop the business up. While I don’t necessarily disagree with doing that, it’s pointless propping a business up, unless you fix the problem that the business got into, in the first place.

Interviewer: Indeed.

Doug: So it’s not just a case of borrowing money on your family home, to pay your creditors, and keep doing the same.

Interviewer: Yes. So Doug how do you help your clients. What do you actually do? What’s the path you take them down, what are the end results?

Doug: Once I’ve been referred a client; first I sit down with them, and see what their goals, and ambitions are. Go through the state of play at the moment, with their business, or their personal finances. Then we work out a plan of action so to speak. Where we establish that, whether they can pursue, pay their debts, or whether they’re better off towing that line in the sea, and moving on. That’s the process we go through, and I guide them and work with them, very much a hands-on approach. Work with them to achieve the goals that they want to achieve.

Interviewer: Right. So in terms of a lot of our audience, who are bookkeepers, as well as small business owners. What do you think a bookkeeper can do to help a business owner, who on paper, as far as the books are concerned, is in difficulty? I mean, I suppose one of the key signs is the delay in paying GST.

Doug: Paying GST superannuation would undoubtedly be the biggest sign. Paying the bookkeepers would probably be another sign too. But generally paying slowly, also living from like, hand to mouth. So moneys coming in the business today, and it’s all being spent straight away, is another indicator that the business, most probably needs some form of restructuring.

Interviewer: So what are the signs they should look for. Is it there in the accounts itself, or is it more about the behavior of the business owner; in terms of that kind of, hand to mouth behavior.

Doug: Yeah, I think it’s more about the behavior. I think with a bookkeeper that’s looking after business. One of the best things they can do, is to do whether it be, weekly or fortnightly. I think monthly is too long, but weekly, or fortnightly reports, which are available in all the accounting programs. They can be emailed straight at, and having a look at the bottom line.

Interviewer: Yes

Doug: I have seen businesses turn around, where that simple philosophy is being adopted, by sending weekly reports, printed out. And all of a sudden, the business owner and the wife, they just start looking and seeing realistically, whether they’re making money or not.

Interviewer: Separately, before we started talking on this podcast, you said to me, you’ve often heard bookkeepers say things like. “Well, I’m just the bookkeeper, it’s not up to me to tell the business owner anything.” I mean to me that does sounds a bit like being a bit too exact. I’ve met many business owners that take a very proactive position. But I’m sure you’ve had bookkeepers come to you, who are more proactive.

Doug: And the bookkeepers are the proactive ones, and take an interest in the business. As opposed to just doing the invoices, or just doing the wages, or balancing the books. The ones that take a proactive approach are the ones that I find refer the extra jobs. So they’re the ones, when you’re thinking of who can I refer, as a bookkeeper. You refer the ones that will take an interest in that, and understand the business.

Interviewer: Yes. What kind of behavior would that typically be? What would you say would be a good bookkeeper, in that regard?

Doug: Well I think, taking control of their expertise. So not wait for the business owner to say, I want a profit and loss statement, or I want a bank reconciliation. To say when you’re talking to the business owner, this is how I operate, and what I do is, I send you weekly report. I do the bank reconciliation weekly, or monthly, or however you choose to do it. But almost be assertive, this is how you operate as a bookkeeper, and say. This is what I stand for as a bookkeeper, as a support for you, for your business.

Interviewer: Right, good. Doug, thanks very much. Now just to remind our listeners that you are the author of a 4th coming book, called How to NOT Pay your Debts, which is a pretty cute title. I might say to our listeners that, it’s actually full of some great ideas, for bookkeepers and their clientele. So that’s a bit of a plug for the book. Our listeners can find you also on your website, which is So Doug before I leave you, I’ll just sign off on this podcast. I’ll just come back to you, just hold the line.

Doug: Thanks.