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Five Tips For Credit Collections

    -    

Get all the Company Information Save yourself time and collect all your customersí information at the one time. Know the phone numbers for whoever approves the invoices, the person who signs the cheques, and any other department of people that have to see you invoice internally.


At the same time request their email addresses and have your own system setup so that you are able to email copy invoices, credit notes, and proof of delivery. If you can do these you will save yourself and your company time. By following these first easy steps your client will recognise your efficiency and be less likely to waste your time once they see you can give them any document immediately. Standard Account


Opening It is tempting in difficult trading conditions to not carry out all credit checks on new customers. This is one of the biggest mistakes that small companies make when opening new credit accounts. Credit accounts are designed to help the sales process and win new customers; but the risks are very high for small businesses who do not take the time to run a standard credit check.


Automat Credit Holds If you had your credit customers sign a credit agreement they should be aware of the time you allow to pay an invoice. In this case automat the account hold process, this saves you call all your customers when they have not paid; often they will be on the phone complaining that their orders are on hold, this gives you a good opportunity to explain the credit terms and explain that your system automatically puts accounts on hold x amount of days after the invoice has not been paid.


In all businesses there are special cases, these are the accounts that never go on hold for example government or education accounts. Know these accounts and treat them as the gold dust that they are. Keep a lawyer on retainer Some customers will not pay not matter what you do; these accounts should be moved through your system as fast as possible. Send the letters on time to put the account on hold, and then get the account out to a lawyer as quickly as possible.


The longer an account goes unpaid the less chance statically you have of ever being paid. Act fast. Offer settlement discounts If you can offer a discount for early payment of invoice many companies will jump at the chance to increase their margins and will pay you early. However settlement discounts can bring two major problems if not managed correctly.


1. Some customers will take the discount even when paying the invoice late. This can be a reconciliation nightmare at month end if your accounting system cannot allocate part payments. 2. After you introduce an invoice discount system it is almost impossible to remove it if the efficiencies have not been achieved.


This can cause some customer relation problems. Above all when working in credit collection the main thing to remember is know your customer. The better you know your customers the easier the collection process can become and the earlier you can spot potential problems.

 
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About Author
   
Articles Stats
  Published Date - July 16 2009
  Total Views - 247
  Total Votes - 1
  Average Rating - 2
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  Mrs. Sarah James
Sarah James works as a travel and financial writer for the web. She is currently writing the content for a credit control guide and credit blog. Away from her computer she can be found wandering the hills in Ireland her favourite pastime.
 
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