The Golden rules of Credit Control

I’m often asked as a consultant Debtologist just what are the golden rules for good credit control?
How can you avoid debtors?
The answer is You can’t but if you:-

A) Carry out due diligence on each and every order.
B) Have a firm credit control policy.
You can minimise your risks.

So what is a Due Diligence Check List?
Terms & Conditions of Trade – Are your Terms & Conditions adequate? Who designed them? What are your settlement terms: 7, 14, 21, 30 days?
Can you claim interest on overdue accounts?
Can you charge your late payer for costs incurred in the collection of the overdue invoice?
Are you protected against damage caused in the fulfilment of your duties?
If the answer to these simple questions is NO, contact a specialist agency.
Account opening forms:
Do you know who is legally responsible for settling your invoice?
Is your client a sole trader, a partnership, a single ltd company or part of a group? Where should you send your invoice? If you don’t have a working account opening form, contact a specialist firm.

Simple 30 day credit control rules:
If your terms are 30 days, on day 14 phone the client and ask two questions.
Question 1: were they happy with the order. If they say they weren’t, you have time to put it right. If they are happy, ask Question 2: When am I going to receive the payment?
Slow paying Accounts.
Never be afraid to ask for your money. A non payer is not a customer, they are a drain on your bank account.
Day 21 Call the client and confirm that the account will be settled, or if not why not? If the client moans, just say “Mary” in accounts is nagging you. If no call is made send a final demand. If your client calls and moans about receiving a letter blame “Mary” in accounts!
Day 37: If payment has not been made, PHONE the client, say “Mary in accounts wants to send the account to the collection agency but you wanted check what the problem was”
Day 40: If payment still has not been made, write to the DEBTOR stating that if payment is not made within 7 days the account will be passed to your preferred collection agency. The letter should be sent by “Mary”
Day 45 send a third party debt collection letter.
Day 55 send a final demand
Day 65 send the account to a firm of debt collectors

For more information please visit our website www.deanemcollections.co.uk