A robust and rigid credit control policy in place is essential to successful recoveries. Start by setting it out in bullet point formation a single sheet of paper.
Failings in this area are generally more commonplace in smaller companies where the focus on the owner is on the day to day running of the business. Having a credit risk strategy and chasing monies is all too often replaced by a “we chase money only when we need it in” or “when I have time to chase” attitude. Sometimes a business is reluctant to chase a customer, concerned it may jeopardise their good relationship.
At the other end of the spectrum there is specialist software or debt collection agencies with their online automated credit control system and process; helping to instil good payment habits in customers and thereby significantly reducing the amount of time needed to chase.
It’s worth remembering that credit is not a right of your customer- it is very much a privilege that you have offered them. To abuse it beyond terms puts them in the wrong, not you. If a customer wishes to avoid being unhappy at the tone of a chase letter or phone call received for an overdue account they should pay on time.
Once again my thanks to Ken Brown of Account Assyst for this Blog