Now that we are almost at the end of January, scary I know and most resolutions have now been forgotten it’s time to take stock and review your business plans for the year. I hope that the following 5 tips will be of assistance.
1) Always carry out a credit check on a new client. Barclays Bank Credit Focus is an excellent product for most limited company credit checks. If your potential client is a non-limited entity, please call our referencing team.
2) Raise your prices: It is a common misconception that you will lose your customers if you raise your prices, wrong. If you raise them by 10% on average you will lose no more than the bottom 10% performing customers, 90% will accept it.
3) Have a variety of pricing structures, after raising your prices you can A) If someone is prepared to pay on receipt of your invoice, offer them 5% discount. B) If someone wants to a longer settlement period, up the price by a further 5%.
4) Make sure you continue to spend as much as you can on marketing yourself. The company that will come out strong from the recession will be the one that is seen or heard.
5) Make sure that you reward your loyal clients with special offers or a discount if they buy or use a specific service.
I hope these tips help, but if you're still unsure and want some advice please do not hesitate to email me david@deanemcollections.co.uk
Saturday, 22 January 2011
Sunday, 16 January 2011
Golden rules for Credit Control.
Having been asked on numerous occasions to reprint the Golden rules of credit control, I've decided that this being my first blog of 2011, I should re-post it the blog I wrote at the beginning of 2010. Hopefully, if you read this it will help you avoid the need for a debt collector.
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.
Due Diligence Check List:
Terms & Conditions – 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: Are 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, remember a non payer is not a customer, they are a drain on your bank account.
Day 21 Call the client on a pretext it could be to find out if they wanted to place their next order before the price goes up, while your talking say “Mary” in credit control is nagging you to be firm this year and ask if they can confirm payment date. Some prefer not to call for the fear of upsetting "the client", if you decide not to make the call 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 mreceived, 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
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.
Due Diligence Check List:
Terms & Conditions – 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: Are 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, remember a non payer is not a customer, they are a drain on your bank account.
Day 21 Call the client on a pretext it could be to find out if they wanted to place their next order before the price goes up, while your talking say “Mary” in credit control is nagging you to be firm this year and ask if they can confirm payment date. Some prefer not to call for the fear of upsetting "the client", if you decide not to make the call 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 mreceived, 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
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