12-Step Collection Process:
The following is taken from the 'UK Debt Recovery Guide 2005-06'
- Check a new customer's creditworthiness before drawing up a contract
- Refuse orders if a customer has an unacceptable payment record, or obtain payment in advance.
- Set strict credit limits and keep to them.
- Prepare unambiguous written contracts and/or terms and conditions of trading.
- Involve the sales force in negotiating the payment terms and ensuring that these are understood and agreed from the outset.
- Make sure you know and comply with procedures used by your customers' buying and accounts departments.
- Initiate and maintain close contact with your customers, particularly with the person responsible for paying your account. Try to create a rapport so that, even when money is tight, you are top of the list to be paid.
- Make regular credit checks on your existing customers.
- Ensure that all dispatch notes and invoices are accurate, and are delivered to the right customer, at the right address, at the right time.
- Put a 'stop' on supplies to customers who are not paying, and use their desire for further supplies as a spur to payment.
- Send regular reminders and chase payment persistently by telephone/fax/e-mail and by visits to your customers.
- If the above fail, place the debt in the hands of a debt collection agency or a solicitor who specialises in debt collection.
Have you also read our Tips for Shielding your Business from Bad Debt?
