Many of the cases that are submitted to our collections department lack any real evidence of the suggested debt in the first instance.
We are frequently bombarded with cases that have only the briefest paper trail of:
• An email confirming the order but not the details of.
• An Invoice that has been submitted and later rebuffed
• A number of emails detailing why the debtor is not going to pay
Consequently this weakens the case when attempting to recover the monies and forces us to apply to the courts in order to hopefully pass judgment. Of course for the creditor to be successful in court we have to hope that the judge understands the parameters of the case and subsequently finds judgement in their favour, which with a lack of evidence is not always guaranteed.
One of the reasons that we developed the ICE PACC was in order to promote due diligence by establishing an auditable paper trail and thereby ensuring that detailed order forms are signed by authorised representatives and that those signatures confirm the receipt of goods or services and are satisfied with the provision.
This, coupled with comprehensive terms, allows the creditor to demonstrate at court that the debtor requested the order and was satisfied with the end product.
In the event that a part of this process is skipped, it potentially allows the debtor to raise a dispute and thus justify the non payment of the invoice.
Additionally a dispute means that a statutory demand can not be considered to be effectively and legally served and therefore we have to obtain judgement first, incurring considerable time delays waiting for the legal process to complete. Quite often small businesses will not go down this avenue due to lack of funds or confidence in securing judgement and as a result are compelled to, reluctantly, write the debt off.
Business owners often tell me that whilst they can see the benefit of a comprehensive credit control policy, they don’t have either the time or resources to create one or that their industry is such that, terms, delivery notes and order confirmation are not common practice and that such action will lead to a loss in sales.
I reply with asking them to lend me £5,000.00 and when they look at me in astonishment I suggest that at the moment they are, essentially, lending businesses owners, who they don’t necessarily know, large sums of money in the form of credit in the hope that they will eventually pay with no real paper trail.
Ultimately if you are going to offer credit in the form of invoicing you need a paper trail that will demonstrate that the debtor owes the outstanding amount without dispute.
If you are looking for a online collections system that promotes Pro Active Credit Control and incorporates FREE pre legal recovery then subscribe to the ICE PACC.
Tuesday, 1 March 2011
Proof of Debt – The Paper Trail
Many of the cases that are submitted to our collections department lack any real evidence of the suggested debt in the first instance.
We are frequently bombarded with cases that have only the briefest paper trail of:
• An email confirming the order but not the details of.
• An Invoice that has been submitted and later rebuffed
• A number of emails detailing why the debtor is not going to pay
Consequently this weakens the case when attempting to recover the monies and forces us to apply to the courts in order to hopefully pass judgment. Of course for the creditor to be successful in court we have to hope that the judge understands the parameters of the case and subsequently finds judgement in their favour, which with a lack of evidence is not always guaranteed.
One of the reasons that we developed the ICE PACC was in order to promote due diligence by establishing an auditable paper trail and thereby ensuring that detailed order forms are signed by authorised representatives and that those signatures confirm the receipt of goods or services and are satisfied with the provision.
This, coupled with comprehensive terms, allows the creditor to demonstrate at court that the debtor requested the order and was satisfied with the end product.
In the event that a part of this process is skipped, it potentially allows the debtor to raise a dispute and thus justify the non payment of the invoice.
Additionally a dispute means that a statutory demand can not be considered to be effectively and legally served and therefore we have to obtain judgement first, incurring considerable time delays waiting for the legal process to complete. Quite often small businesses will not go down this avenue due to lack of funds or confidence in securing judgement and as a result are compelled to, reluctantly, write the debt off.
Business owners often tell me that whilst they can see the benefit of a comprehensive credit control policy, they don’t have either the time or resources to create one or that their industry is such that, terms, delivery notes and order confirmation are not common practice and that such action will lead to a loss in sales.
I reply with asking them to lend me £5,000.00 and when they look at me in astonishment I suggest that at the moment they are, essentially, lending businesses owners, who they don’t necessarily know, large sums of money in the form of credit in the hope that they will eventually pay with no real paper trail.
Ultimately if you are going to offer credit in the form of invoicing you need a paper trail that will demonstrate that the debtor owes the outstanding amount without dispute.
If you are looking for a online collections system that promotes Pro Active Credit Control and incorporates FREE pre legal recovery then subscribe to the ICE PACC.
We are frequently bombarded with cases that have only the briefest paper trail of:
• An email confirming the order but not the details of.
• An Invoice that has been submitted and later rebuffed
• A number of emails detailing why the debtor is not going to pay
Consequently this weakens the case when attempting to recover the monies and forces us to apply to the courts in order to hopefully pass judgment. Of course for the creditor to be successful in court we have to hope that the judge understands the parameters of the case and subsequently finds judgement in their favour, which with a lack of evidence is not always guaranteed.
One of the reasons that we developed the ICE PACC was in order to promote due diligence by establishing an auditable paper trail and thereby ensuring that detailed order forms are signed by authorised representatives and that those signatures confirm the receipt of goods or services and are satisfied with the provision.
This, coupled with comprehensive terms, allows the creditor to demonstrate at court that the debtor requested the order and was satisfied with the end product.
In the event that a part of this process is skipped, it potentially allows the debtor to raise a dispute and thus justify the non payment of the invoice.
Additionally a dispute means that a statutory demand can not be considered to be effectively and legally served and therefore we have to obtain judgement first, incurring considerable time delays waiting for the legal process to complete. Quite often small businesses will not go down this avenue due to lack of funds or confidence in securing judgement and as a result are compelled to, reluctantly, write the debt off.
Business owners often tell me that whilst they can see the benefit of a comprehensive credit control policy, they don’t have either the time or resources to create one or that their industry is such that, terms, delivery notes and order confirmation are not common practice and that such action will lead to a loss in sales.
I reply with asking them to lend me £5,000.00 and when they look at me in astonishment I suggest that at the moment they are, essentially, lending businesses owners, who they don’t necessarily know, large sums of money in the form of credit in the hope that they will eventually pay with no real paper trail.
Ultimately if you are going to offer credit in the form of invoicing you need a paper trail that will demonstrate that the debtor owes the outstanding amount without dispute.
If you are looking for a online collections system that promotes Pro Active Credit Control and incorporates FREE pre legal recovery then subscribe to the ICE PACC.
Tuesday, 15 February 2011
Late Payment, Disputes, Non payment of Invoices -
Is your industry prone to late payment, disputes or non payment of invoices?
If the answer is yes then read on.
Do the following factors inhibit payment?
1. Customers companies entering into liquidation or pre pack administration
2. A variety of valid or bogus disputes being raised on the services or goods provided
3. Chains of late payment or debt; such as your customer waiting to be paid and thus unable to settle your outstanding invoice.
If the above affect the financial performance of your business then consider ICE PACC as a credit management tool to assist you in preventing such issues.
Liquidations and Administration of Companies can often leave the supplier with not only a bitter taste in their mouth but the inability to service their own business. Therefore when you offer a customer credit, where possible, request a personal guarantee for payment so that they are unable to hide behind the limited liability of their company. If they refuse then ask yourself how badly you need the business and if you can sustain the loss in event of non payment. With a personal guarantee you are offering unsecured credit and thus must accept the risk that you are undertaking which ultimately may mean non payment.
ICE PACC provides you with such terms to submit to your customers within in its product offering.
Disputes are a constant frustration and quite often are not raised until the supplier enquires as to why their invoices have not been settled. The issue is that very often the supplier has allowed such a scenario to arise due to a lack of due diligence within their business.
Whilst it is not always practical one must endeavour to do the following:
• Get you terms signed
• Get a signed document detailing the authorised representatives that can sign for orders on the directors behalf
• Get order forms signed
• Get delivery notes signed
• Get a satisfaction note signed, as delivery does not necessarily mean that the customer is satisfied with the suppliers goods or services
Consequently you are able to establish that the customer has received and are happy with the goods or services requested. A signature is essential when reviewing evidence in court if a request for judgement has been submitted. Essentially, “you signed to say you would and could pay for the goods or services, you signed to agree the order, you signed to say it’s been delivered and furthermore you signed to say it met with your approval!”,now pay!
“I can’t pay you, until I get paid”, what happens if your customer doesn’t get paid?
Again if you have offered unsecured credit then good luck, if however you have offered secured credit via a personal guarantee and have ensured that all due diligence has been undertaken you have a greater chance of recovering the money.
Offering credit is a bit of a gamble but it’s up you how big the stakes are. It doesn’t have to be like a day at the races when your horse doesn’t come in you are mopping over what could have been.
Do you really want to gamble with your businesses future or would you prefer to implement a credit management policy that will help you gallop furlongs ahead of your competition.
Better cash flow, better business, better performance, better profitability.
If you are interested in finding out more about the ICE PACC then contact me directly on 01183 240 336
If the answer is yes then read on.
Do the following factors inhibit payment?
1. Customers companies entering into liquidation or pre pack administration
2. A variety of valid or bogus disputes being raised on the services or goods provided
3. Chains of late payment or debt; such as your customer waiting to be paid and thus unable to settle your outstanding invoice.
If the above affect the financial performance of your business then consider ICE PACC as a credit management tool to assist you in preventing such issues.
Liquidations and Administration of Companies can often leave the supplier with not only a bitter taste in their mouth but the inability to service their own business. Therefore when you offer a customer credit, where possible, request a personal guarantee for payment so that they are unable to hide behind the limited liability of their company. If they refuse then ask yourself how badly you need the business and if you can sustain the loss in event of non payment. With a personal guarantee you are offering unsecured credit and thus must accept the risk that you are undertaking which ultimately may mean non payment.
ICE PACC provides you with such terms to submit to your customers within in its product offering.
Disputes are a constant frustration and quite often are not raised until the supplier enquires as to why their invoices have not been settled. The issue is that very often the supplier has allowed such a scenario to arise due to a lack of due diligence within their business.
Whilst it is not always practical one must endeavour to do the following:
• Get you terms signed
• Get a signed document detailing the authorised representatives that can sign for orders on the directors behalf
• Get order forms signed
• Get delivery notes signed
• Get a satisfaction note signed, as delivery does not necessarily mean that the customer is satisfied with the suppliers goods or services
Consequently you are able to establish that the customer has received and are happy with the goods or services requested. A signature is essential when reviewing evidence in court if a request for judgement has been submitted. Essentially, “you signed to say you would and could pay for the goods or services, you signed to agree the order, you signed to say it’s been delivered and furthermore you signed to say it met with your approval!”,now pay!
“I can’t pay you, until I get paid”, what happens if your customer doesn’t get paid?
Again if you have offered unsecured credit then good luck, if however you have offered secured credit via a personal guarantee and have ensured that all due diligence has been undertaken you have a greater chance of recovering the money.
Offering credit is a bit of a gamble but it’s up you how big the stakes are. It doesn’t have to be like a day at the races when your horse doesn’t come in you are mopping over what could have been.
Do you really want to gamble with your businesses future or would you prefer to implement a credit management policy that will help you gallop furlongs ahead of your competition.
Better cash flow, better business, better performance, better profitability.
If you are interested in finding out more about the ICE PACC then contact me directly on 01183 240 336
Wednesday, 19 January 2011
Company Credit Checks - Forewarned is forearmed!
Credit checking a potential company is an integral part of your credit management policy. Ultimately you are able to from your investigation determine the risk that your company will undertake be offering the potential customer credit.
Considerations should include:
• What is the company formation and are they protected by limited liability?
• What are the directors other current appointments?
• What are the directors’ previous appointments?
• Have the directors been involved with companies that have gone into liquidation, administration or been dissolved?
• Does the director have a non trading company sitting in the background?
• Is the trading address cited the true trading address?
• Is the directors cited domestic residence correct and do they appear on the electoral roll.
• Does the company have any CCJ’s
• Are their any mortgage charges assigned?
• Who are the company shareholders?
• If the company shareholder is a company, do I need to investigate that also?
• Does the director have other appointments that might be cited at a different address and therefore not immediately apparent on your initial investigation?
• What is the current credit score for that customer?
• What is the suggested current credit value for that customer?
• What is the trading status of the customer?
• What financial information are you able to ascertain?
• Has there been a company name change previously?
• If there has been, does this relate to a pre packaged administration?
• Has there been a winding up order previously on this company?
• How erratic has their credit rating been?
Once you have taken into consideration the above information you are able to assess the credit worthiness of your potential customer. Based on your findings you are then able to either:
• Decline from the potential custom
• Request payment in advance or on delivery
• Offer unsecured credit and run the risk within payment terms that are acceptable.
• Offer credit with a personal guarantee and reduce the risk
• Do nothing and hope for the best!
Remember the credit environment has changed globally in the last four years. Personal guarantee’s are no longer a dirty word and are in some industries considered to be standard practise. Therefore as a business you can plan a credit management policy that suits your business.
If you are offering credit to a customer, it will remain a liability until the subsequent invoices are settled. Consequently an order is only a sale when it’s paid for, until then it’s a potential debt!
If you ask the bank for a loan, you will be credit checked and you have to sign an agreement. This is because banks are financial institutions that understand the risk of lending, particularly now!
Would you lend money to someone who you didn’t know? If the answer is “yes”, then perhaps you’d lend me some! If the answer is “no” then why are you offering credit to a customer that you have no knowledge of, with the hope that they will eventually pay?
So there is the argument that it’s better to have the custom as opposed to being exceptionally cautious and having no business! But if the customers don’t settle their bills, then do you ultimately have a business in the long term anyway?
Furthermore if your potential customer is a large corporation they may dictate the terms of credit that you offer based on the fact that you won’t decline their offer of business. But a credit check will assist you in making a informed decision and determine if the potential risk is worth taking.
Forewarned is Forearmed, and when taking on the risk of credit it is essential.
The ICE PACC will automatically perform a credit check for all of your potential customers and then cite the potential risk of offering credit prior to engaging their custom. This is a small aspect of the service that you receive from subscribing to this unique and comprehensive credit management tool.
Contact us directly at info@icepacc.com
Considerations should include:
• What is the company formation and are they protected by limited liability?
• What are the directors other current appointments?
• What are the directors’ previous appointments?
• Have the directors been involved with companies that have gone into liquidation, administration or been dissolved?
• Does the director have a non trading company sitting in the background?
• Is the trading address cited the true trading address?
• Is the directors cited domestic residence correct and do they appear on the electoral roll.
• Does the company have any CCJ’s
• Are their any mortgage charges assigned?
• Who are the company shareholders?
• If the company shareholder is a company, do I need to investigate that also?
• Does the director have other appointments that might be cited at a different address and therefore not immediately apparent on your initial investigation?
• What is the current credit score for that customer?
• What is the suggested current credit value for that customer?
• What is the trading status of the customer?
• What financial information are you able to ascertain?
• Has there been a company name change previously?
• If there has been, does this relate to a pre packaged administration?
• Has there been a winding up order previously on this company?
• How erratic has their credit rating been?
Once you have taken into consideration the above information you are able to assess the credit worthiness of your potential customer. Based on your findings you are then able to either:
• Decline from the potential custom
• Request payment in advance or on delivery
• Offer unsecured credit and run the risk within payment terms that are acceptable.
• Offer credit with a personal guarantee and reduce the risk
• Do nothing and hope for the best!
Remember the credit environment has changed globally in the last four years. Personal guarantee’s are no longer a dirty word and are in some industries considered to be standard practise. Therefore as a business you can plan a credit management policy that suits your business.
If you are offering credit to a customer, it will remain a liability until the subsequent invoices are settled. Consequently an order is only a sale when it’s paid for, until then it’s a potential debt!
If you ask the bank for a loan, you will be credit checked and you have to sign an agreement. This is because banks are financial institutions that understand the risk of lending, particularly now!
Would you lend money to someone who you didn’t know? If the answer is “yes”, then perhaps you’d lend me some! If the answer is “no” then why are you offering credit to a customer that you have no knowledge of, with the hope that they will eventually pay?
So there is the argument that it’s better to have the custom as opposed to being exceptionally cautious and having no business! But if the customers don’t settle their bills, then do you ultimately have a business in the long term anyway?
Furthermore if your potential customer is a large corporation they may dictate the terms of credit that you offer based on the fact that you won’t decline their offer of business. But a credit check will assist you in making a informed decision and determine if the potential risk is worth taking.
Forewarned is Forearmed, and when taking on the risk of credit it is essential.
The ICE PACC will automatically perform a credit check for all of your potential customers and then cite the potential risk of offering credit prior to engaging their custom. This is a small aspect of the service that you receive from subscribing to this unique and comprehensive credit management tool.
Contact us directly at info@icepacc.com
Thursday, 13 January 2011
Will your New Customer kill your business?
When you are approached by a potential customer you will no doubt be excited by the addition to your revenue stream. However consider the following:
The addition of this potential customer significantly increases your company’s net profit and is considered a life changing opportunity for you and your business. Consequently you eagerly approach your bank for an increase in your business overdraft in order to facilitate the new business that your customer requires you to undertake. The bank authorises the overdraft, however you are required to sign a personal guarantee in-case your business is unable to repay the loan. You happily sign the agreement certain that the revenue from your new customer and subsequent profit will alleviate any such problem.
With the overdraft in place and your new customer on board, business could never be better!
You’ve agreed 90 days payment with your new customer, not ideal, but acceptable based on the level of business they are bringing to your company.
90 days after the first invoice has been submitted the customer has still not settled their fist invoice. Furthermore the total outstanding account, if not paid, will cripple your business. However your customer assures you that the delay is simply down to the accounts department and the fact that you are a new supplier.
120 days later you begin to get concerned as none of the invoices have been settled and the outstanding amount if not paid will put your company into an insolvent position. However you continue to service the customer in order to ensure that there is no ill feeling, that may prevent further orders, and that payment of existing invoices is eventually made.
180 days later you receive correspondence from an insolvency practitioner stating that your customer has gone into administration and that you are invited to submit the amount that you are owed so that it can be added to the creditors listing.
With your overdraft in full use and very little other receivables to rely on you read the insolvency practitioners correspondence with complete and utter dread. Questions running through your brain:
• How am I going to pay the wages?
• How am I going to pay my bills?
• How am I going to pay my overdraft?
• What am I going to say to my family?
• How am I going to survive?
After visiting the bank to explain you realise that they are not going to support you and very quickly you are forced to liquidate your business.
Moreover the bank calls in the personal guarantee on your loan which eventually results in you having to sell your house, as a result of a force of sale.
The stress of the business failure and subsequent cash strain on you has a detrimental effect on your relationships at home.
You are left with no business, strained relationships at home and a complete loss in confidence!
If only you had taken time to consider the customers credit reports and subsequent score so that you could truly assess the risk that you were undertaking.
Furthermore you needed to plan your credit management policy so that you ensured that your receivables were received.
A comprehensive credit management policy can assist in preventing bad debt and at the same time promote prompt payment in order to assist your cash flow.
More importantly your terms of credit need to reflect the risk that you are undertaking. Had you in this situation insisted on a personal guarantee you may not have been awarded the business. However since non payment has resulted in the demise of your business, the perhaps this may have been a good thing! Had you obtained a personal guarantee likely hood is that you would not have found yourself in this horrid situation.
A few months on you see your customer, driving a expensive car and find that he still in business and is doing well as a result of the pre packaged administration of his previous company. You feel angry, frustrated and defeated!
Hindsight is a wonderful thing, but what is certain is the fact that prevention is better than the cure.
ICE PACC is designed to prevent such scenarios from happening and as a credit management tool can be used to assist you and your company from limiting your liabilities thus reducing the risk that you as a business undertake when offering credit to potential customers.
The ICE PACC will:
• Assess your potential customers credit worthiness
• Offer terms that will hold the customer to account
• Provide you with a comprehensive online credit management tool
• Facilitate FREE pre legal debt recovery.
For further information contact us directly at info@icepacc.com or view the product at www.icepacc.com
The addition of this potential customer significantly increases your company’s net profit and is considered a life changing opportunity for you and your business. Consequently you eagerly approach your bank for an increase in your business overdraft in order to facilitate the new business that your customer requires you to undertake. The bank authorises the overdraft, however you are required to sign a personal guarantee in-case your business is unable to repay the loan. You happily sign the agreement certain that the revenue from your new customer and subsequent profit will alleviate any such problem.
With the overdraft in place and your new customer on board, business could never be better!
You’ve agreed 90 days payment with your new customer, not ideal, but acceptable based on the level of business they are bringing to your company.
90 days after the first invoice has been submitted the customer has still not settled their fist invoice. Furthermore the total outstanding account, if not paid, will cripple your business. However your customer assures you that the delay is simply down to the accounts department and the fact that you are a new supplier.
120 days later you begin to get concerned as none of the invoices have been settled and the outstanding amount if not paid will put your company into an insolvent position. However you continue to service the customer in order to ensure that there is no ill feeling, that may prevent further orders, and that payment of existing invoices is eventually made.
180 days later you receive correspondence from an insolvency practitioner stating that your customer has gone into administration and that you are invited to submit the amount that you are owed so that it can be added to the creditors listing.
With your overdraft in full use and very little other receivables to rely on you read the insolvency practitioners correspondence with complete and utter dread. Questions running through your brain:
• How am I going to pay the wages?
• How am I going to pay my bills?
• How am I going to pay my overdraft?
• What am I going to say to my family?
• How am I going to survive?
After visiting the bank to explain you realise that they are not going to support you and very quickly you are forced to liquidate your business.
Moreover the bank calls in the personal guarantee on your loan which eventually results in you having to sell your house, as a result of a force of sale.
The stress of the business failure and subsequent cash strain on you has a detrimental effect on your relationships at home.
You are left with no business, strained relationships at home and a complete loss in confidence!
If only you had taken time to consider the customers credit reports and subsequent score so that you could truly assess the risk that you were undertaking.
Furthermore you needed to plan your credit management policy so that you ensured that your receivables were received.
A comprehensive credit management policy can assist in preventing bad debt and at the same time promote prompt payment in order to assist your cash flow.
More importantly your terms of credit need to reflect the risk that you are undertaking. Had you in this situation insisted on a personal guarantee you may not have been awarded the business. However since non payment has resulted in the demise of your business, the perhaps this may have been a good thing! Had you obtained a personal guarantee likely hood is that you would not have found yourself in this horrid situation.
A few months on you see your customer, driving a expensive car and find that he still in business and is doing well as a result of the pre packaged administration of his previous company. You feel angry, frustrated and defeated!
Hindsight is a wonderful thing, but what is certain is the fact that prevention is better than the cure.
ICE PACC is designed to prevent such scenarios from happening and as a credit management tool can be used to assist you and your company from limiting your liabilities thus reducing the risk that you as a business undertake when offering credit to potential customers.
The ICE PACC will:
• Assess your potential customers credit worthiness
• Offer terms that will hold the customer to account
• Provide you with a comprehensive online credit management tool
• Facilitate FREE pre legal debt recovery.
For further information contact us directly at info@icepacc.com or view the product at www.icepacc.com
Wednesday, 12 January 2011
Credit Control Software featured on Credit Management Matters
ICE PACC is now featured on the Credit Management Matters website, offering subscribers the opportunity to manage their credit control in a more effective manner. The innovative online system will assess your potential customers credit worthiness, incorporates a comprehensive, easy to use, credit control system and offers FREE pre-legal recovery when payments are late.
To view the link go to: http://www.creditmanagement.org.uk/
To view the link go to: http://www.creditmanagement.org.uk/
Wednesday, 5 January 2011
Credit Managment Policy 2011
Have you decided upon a New Years Resolution this year, or are you not bothering?
Perhaps you’ve considered taking up a new fitness regime, not drinking as much, stopped smoking or some other discipline to make your lifestyle healthier.
Alternatively you may have decided to have a change of attitude to your outlook on life, be more dynamic, work smarter or indeed spend more quality time with your family?
Its fair to say that New Years Resolutions are often fairly short lived and within no time we are living our lives as we have always lived them.
Why do we make New Years resolutions in the first place? For some it’s just tradition and for others it’s because they really want to change something about their life or business.
So I guess the question for me is, do you really want to make a difference to your business? Furthermore if you have identified an opportunity to reduce bad debt and increase sales by growing your client base then read on!
A comprehensive credit management policy can often be seen as being a business inhibitor as it may be deemed too restrictive by the customer and thus a deal breaker. This does not have to be the case if it is both well thought out and presented to demonstrate a proffessional approach committed to great customer service.
Remember, if you are offering credit, whether it be seven days, thirty days or more, you are exposing your business by the undertaking of a liability. Obviously the risk being that you may not get paid, or that payment is delayed causing cash flow issues for your business.
So take time to plan your credit management policy.
• Do I wish to assess the credit worthiness of my potential customer?
• Do I wish to offer secured or unsecured credit?
• How do I document my Orders / Deliveries / Customer Satisfaction
• How do I document my customer correspondence?
• Do I get customers to sign all relevant correspondence?
• Who is authorised to sign correspondence on behalf of the customer?
• How do I reduce the risk of potential disputes?
• How do I deal with disputes?
• Are disputes documented both when they are raised and resolved?
• How do I issue my invoices and ensure that they have been received?
• How do I monitor the ongoing credit worthiness of my client to ensure that during the longevity of our relationship their circumstances don’t change?
• What do I do when the payment terms expire and monies have not been received?
• What do I do when request for payments are rebuffed?
• How do I recover my outstanding monies both pre-legal and legal?
• At what point do I employ a legal representative to assist me?
By answering these simple questions you will start to map your current credit management policy and hopefully identify areas that will require improvement.
Over the course of the proceeding weeks I will be addressing each question specifically and offering my view point in order to assist you and your business and why, as a result, a comprehensive credit management policy can assist your sales and cash flow whilst reducing your business exposure. Further more my plan will assist when you are required to seek judgment against your customer.
Remember Credit Management is often like a hang over, the following day when you are feeling the pain, whether it be due to excess alcohol or non payment, you mutter; “Never never again!” – Until the next time!!
So let’s make our New Year Resolution that our credit management policy will be comprehensive and well planned in order to promote and preserve your business!
Have a great 2011!
ICE PACC is a comprehensive on-line credit managment system. www.icepacc.com
Perhaps you’ve considered taking up a new fitness regime, not drinking as much, stopped smoking or some other discipline to make your lifestyle healthier.
Alternatively you may have decided to have a change of attitude to your outlook on life, be more dynamic, work smarter or indeed spend more quality time with your family?
Its fair to say that New Years Resolutions are often fairly short lived and within no time we are living our lives as we have always lived them.
Why do we make New Years resolutions in the first place? For some it’s just tradition and for others it’s because they really want to change something about their life or business.
So I guess the question for me is, do you really want to make a difference to your business? Furthermore if you have identified an opportunity to reduce bad debt and increase sales by growing your client base then read on!
A comprehensive credit management policy can often be seen as being a business inhibitor as it may be deemed too restrictive by the customer and thus a deal breaker. This does not have to be the case if it is both well thought out and presented to demonstrate a proffessional approach committed to great customer service.
Remember, if you are offering credit, whether it be seven days, thirty days or more, you are exposing your business by the undertaking of a liability. Obviously the risk being that you may not get paid, or that payment is delayed causing cash flow issues for your business.
So take time to plan your credit management policy.
• Do I wish to assess the credit worthiness of my potential customer?
• Do I wish to offer secured or unsecured credit?
• How do I document my Orders / Deliveries / Customer Satisfaction
• How do I document my customer correspondence?
• Do I get customers to sign all relevant correspondence?
• Who is authorised to sign correspondence on behalf of the customer?
• How do I reduce the risk of potential disputes?
• How do I deal with disputes?
• Are disputes documented both when they are raised and resolved?
• How do I issue my invoices and ensure that they have been received?
• How do I monitor the ongoing credit worthiness of my client to ensure that during the longevity of our relationship their circumstances don’t change?
• What do I do when the payment terms expire and monies have not been received?
• What do I do when request for payments are rebuffed?
• How do I recover my outstanding monies both pre-legal and legal?
• At what point do I employ a legal representative to assist me?
By answering these simple questions you will start to map your current credit management policy and hopefully identify areas that will require improvement.
Over the course of the proceeding weeks I will be addressing each question specifically and offering my view point in order to assist you and your business and why, as a result, a comprehensive credit management policy can assist your sales and cash flow whilst reducing your business exposure. Further more my plan will assist when you are required to seek judgment against your customer.
Remember Credit Management is often like a hang over, the following day when you are feeling the pain, whether it be due to excess alcohol or non payment, you mutter; “Never never again!” – Until the next time!!
So let’s make our New Year Resolution that our credit management policy will be comprehensive and well planned in order to promote and preserve your business!
Have a great 2011!
ICE PACC is a comprehensive on-line credit managment system. www.icepacc.com
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