Tips to keep cash flowing in credit management
Companies are now being tested as never before
. The widely reported difficulties in the U.S. sub-prime mortgages zone that led to the possibility of credit crunch which has been mainly bank of Inter issues may still affect the British economy. While the magnitude of the impact is yet to be felt.Here are top tips that how you can keep your cash flowing in credit management and can earn more profit
1. Know the customer:
Knowledge is power, as they say, so be sure to use it wisely.
Check the name and legal status (you will need if you have to take legal action to recover the debt)
Use corporate verified letterhead
Make sure that the details of the order is from same entity
Use the referral agent to verify further details and their credit status.
Ask for references from other suppliers and check them (and other providers).
2. Agree with payment terms before you supply.
Assumption is always dangerous, so be sure from the outset that how you are going to conduct your business.
Do not assume that you will be paid on 30 days or on end of the month after approval of the following.
Establish payment terms and acceptance in written.
Be sure that customer's order does not suggest any different terms.
Set our penalty terms for late payment charges and interest if payment is late - but without requiring them right, it will be useful
3. Invoice accurately, clearly and promptly.
Attention to detail can make all the difference in getting paid on time.
An invoice can't be paid until it's received.
An invoice won't be paid if the goods or services aren't clearly specified.
An invoice won't be paid if the customer's order number isn't quoted.
An invoice won't be paid if it's sent to the wrong address or has the wrong company name on it
A disputed invoice won't be paid.
4. Encourage prompt payment
To encourage payment always tell your customer about the percentage of discount on payment if they paid within the decided time period. Make the amount they could save clear on the invoice and encourage it. Your business will be in a much better financial situation if you can get a large proportion of your customers paying quickly. And you can always able to build the discount into your pricing structure.
5. DO NOT be afraid to ask for payment and to take action.
DO NOT be afraid to ask for payment, the customer pays good customer, and if not ask, do not you can be.
Telephone before the due date to make sure everything is OK for large amount.
Contact them immediately when payment hasn't arrived
Be firm about what you expect and when you expect.
Make sure you wait for the consequences of non-payment
Follow the promises to ensure that they are met
Customers, who do not pay, must be reminded to take action. And do not fall into the trap of not wanting to pursue a paying customer, for fear of losing them. A customer who gives orders, but not paying for them is a threat to your business.
6. Treat credit control as an important job every week
Put 30 minutes per week to one side to try to control credit and do not let anything get in the way! The secret of good credit control is monitoring and tracking of each bill and to know that what owed to you at any one time. This is easy if you do not let problems accumulate, and move from bad debts to an experts when you cannot go further. The peace that will give you free time to concentrate on more important things in your business.
Read more about cash flow management and billing software at http://rapid-billing.com
Tips to keep cash flowing in credit management
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