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Essential Debt Collection Checklist 2021
No matter what sector of the economy you work in, it is a fact of business life that at some point you will experience the problem of late payment. Clients or customers who don’t pay on time can cause significant problems to any business, hitting your cash flow and using up valuable time and resources as you chase the debt. To help you streamline your debt collection efforts, we’ve put together a handy checklist of the key points to bear in mind when addressing debt.
- Ensure you have an effective system for tracking invoices, ideally automated, so that you can spot potential late payments quickly.
- Begin chasing invoices as soon as they are due. Remember, if you don’t have an agreed payment period in place, the default rule is that invoices have to be paid in 30 days
- Double check that all of the details on the invoice are accurate, including the due date, the amount of the invoice, customer information and your company details.
- Set up a clear process for chasing debt, which details which actions you will take at each stage of the debt, and the methods you will use, including emails, phone calls or letters.
- Ensure that you have identified the correct contact if the debt is owed by a company or organisation and send a polite letter as the first step, following up with telephone calls.
- Consider which contact methods may be most appropriate for each debt
- Offer a range of payment methods to make it easier for customers to pay their debts.
- Maintain accurate records at each stage of the debt collection process, including full details of which individuals you have been in contact with and the details of any conversations.
- If reasons for the delay are given, consider these fairly, being wary of the potential for delaying tactics. Where appropriate, offer a schedule of payments and use your judgement on the issue of claiming debt recovery costs or interest on the payment.
- If promises or commitments are made, follow up to ensure that these are being kept.
- Consider halting further credit sales until the debt has been resolved.
- Consider Using a Debt Recovery Agency
Some debts are harder to recover than others, and many businesses opt to use the services of a modern debt collection agency. A reputable debt recovery company will use their expertise to ensure the quickest possible repayment of debt, while maintaining good customer relations, leaving you free to focus on your business. If you have an outstanding debt that you are struggling to collect, or you have a question about debt recovery, get in touch with us today.
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