Credit Management

Tips to chase those overdue Debtors

Chasing overdue Clients for payment can be one of the most arduous tasks in a Business.

Here are some of the procedures I put in place each week for one of my clients, whose Business consists of 6 people, that I work one day a week for:

Weekly:

A print out of each Sales Representatives overdue customers sent to them, advising who is on Stop Credit and who needs to be watched. Its important that the Sales Team works with the Accounts Department so they are not selling goods to bad risk customers.

For each customer contacted , I type in their contact logs (we use MYOB) what has transpired so that the rest of the staff can see which customer has been contacted.

Week One:
After the Statements are sent, I send a friendly reminder plus invoice copies of the overdues.

Week Two – Four:
I mark off each customer that has paid in the contact log. I then ring the overdues that are left and advise the Sales Representatives on their weekly overdue Debtors list.

20th of each month:
When overdues are 60 days they are put on credit hold and I record this in their contact logs. I also advise the Sales Representatives.

I find this system works really well and we have increased my clients cash-flow a lot by this method.

The secret is to consistent and ring when you say you are going to ring. If your Business has staff, its crucial to work together and all be on the same page. If you are a Sole Trader set aside one morning per week or you can employ a Bookkeeper to help.

Whether you do Credit Management yourself or hire a Bookkeeper, this is a very crucial step in helping increase your Cash-flow.

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