Receiving late payment is a major issue in every outranking business. In order to eliminate that risk every business should set a proper credit control procedure. It will help the business to ensure its financial stability. To ensure that your business is paid on time having a proper credit control procedure is very necessary. In addition to that always ensure to follow the process with a little strict manner and portray that you follow the collection process seriously so that the debtor makes the payment on time.
Here are 5 steps for setting up an appropriate credit control procedure:
Establish a proper agreement
Set up clear terms and conditions for allowing any credit and for credit payment procedure. Ensure the proper documentation of those rules and guidelines. You should provide a copy of those guidelines to every customer and debtor who owes money to you. Also, ensure that customers acknowledge the steps that may be taken in case of late or unpaid debts.
Research on your customer
This is one of the most important processes. Always ensure the background of the customers such as their trade name, contact details, addresses, etc. Using this data you can find the risk that is involved in paying to that customer. There are many online portals that help you in getting to know whether your customer has a good credit score or not. It is very crucial to know whether your customer is creditworthy or not.
Include a variety of payment options
Include various payment methods for ensuring that customers can pay them on time either way. If a customer is finding it difficult to pay in terms of cash or bank transfer you can ask them to pay by cheque. This will ensure your payment on time and also helps the customer by providing a convenient mode of payment.
Schedule the appropriate payment reminder
Keep track of the late payments and schedule the payment reminder if necessary. You can also provide discounts or incentives in case of early payment. Offering such discounts will encourage the customers and debtors to make their payment on time and get the discounts on the payment. Also, remind them if they are unable to make the payment on the due date you will charge the late fee. Doing so will make the debtor or customer avoid the late payment and give you the payment on time.
Take help from a debt collection agency
In case, if a customer still refuses to pay the debt after all the reminders and follow up. You should take help from a debt collection agency. Dealing with the customers who are unwilling to pay the debt consumes a lot of your time and resources. In order to eliminate that, hiring a debt collection agency would be a wise decision. But before hiring one, read about their procedures here. It will help you in saving a lot of time and also ensure your payment recovery.
Unpaid debts affect your business cash flow and finances. Always be double sure before taking any financial decision or lending money to any debtor. You should ensure to keep an eye on your client’s credit score. You can alter your terms and conditions for trustworthy clients as client relationship management is very important for any business.
Here are 5 steps for setting up an appropriate credit control procedure:
Establish a proper agreement
Set up clear terms and conditions for allowing any credit and for credit payment procedure. Ensure the proper documentation of those rules and guidelines. You should provide a copy of those guidelines to every customer and debtor who owes money to you. Also, ensure that customers acknowledge the steps that may be taken in case of late or unpaid debts.
Research on your customer
This is one of the most important processes. Always ensure the background of the customers such as their trade name, contact details, addresses, etc. Using this data you can find the risk that is involved in paying to that customer. There are many online portals that help you in getting to know whether your customer has a good credit score or not. It is very crucial to know whether your customer is creditworthy or not.
Include a variety of payment options
Include various payment methods for ensuring that customers can pay them on time either way. If a customer is finding it difficult to pay in terms of cash or bank transfer you can ask them to pay by cheque. This will ensure your payment on time and also helps the customer by providing a convenient mode of payment.
Schedule the appropriate payment reminder
Keep track of the late payments and schedule the payment reminder if necessary. You can also provide discounts or incentives in case of early payment. Offering such discounts will encourage the customers and debtors to make their payment on time and get the discounts on the payment. Also, remind them if they are unable to make the payment on the due date you will charge the late fee. Doing so will make the debtor or customer avoid the late payment and give you the payment on time.
Take help from a debt collection agency
In case, if a customer still refuses to pay the debt after all the reminders and follow up. You should take help from a debt collection agency. Dealing with the customers who are unwilling to pay the debt consumes a lot of your time and resources. In order to eliminate that, hiring a debt collection agency would be a wise decision. But before hiring one, read about their procedures here. It will help you in saving a lot of time and also ensure your payment recovery.
Unpaid debts affect your business cash flow and finances. Always be double sure before taking any financial decision or lending money to any debtor. You should ensure to keep an eye on your client’s credit score. You can alter your terms and conditions for trustworthy clients as client relationship management is very important for any business.
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