One of my most read blogs is on effective credit control – see http://bit.ly/OhRw5E
Debt collection is one of the most important business functions to maintain healthy cashflows and grow the business. So it is worth repeating the top tips for effective debt collection.
Here are my top 10 tips:
1. Get to know your customers
2. Carry out credit checks on them regularly
3. Set credit limits for each customer
4. State your terms and conditions clearly on your bills
5. Bill on time and ensure bills are received
6. Send statements regularly as reminders
6. Chase up by telephone and in writing
7. Meet your customer if payments are delayed and agree a payment schedule
8. Set up and monitor credit control targets and key performance indicators such as debtor days
9. Keep records of every telephone conversation, dates when statements and letters were sent
10. If the above fails, take further action – employ a debt collection agency or lawyer
Effective debt collection is all about pro active credit control and ensuring customers know what to expect from you.
After all, if you don’t take action, the presumption is that you are not bothered about getting paid.
If you don’t get paid, you have just donated a gift to that customer and thats’ the fastest way to ruining your business.