Companies are often slow to chase outstanding payments. When a customer doesn't pay, they're hanging on to money that is rightfully yours and you should ask for it.
- A member of staff should have time dedicated each week to following this process in order to keep on top of the ledger. Often chasing outstanding payments is pushed to one side in favour of more enjoyable work!
- Chasing payments should not be carried out by Directors or Sales staff. It's important to separate this role to ensure that business relationships on other levels are not affected.
- Keep a record of all collection activity. This will be vital later if you have to engage a third party Debt Recovery agent or take legal action.
- For new customers, or if the invoice is large, call the customer before the payment due date to make sure it has been received and that there is no query.
- Contact your customer immediately payment has not arrived, be assertive about what you expect and when you expect it, and make the consequences of non-payment of invoices clear. Follow up promises to make sure they're met.
- Establish a systematic approach to calling your customers, issuing statements, sending chasing letters (which gradually become firmer) and escalating to Final Demand. Credit Control software can be very helpful in managing this process.
- Establish procedures for handling customer queries. Often payments are slowed down due to a query that is waiting to be resolved by Sales or Service staff.
- TAK Credit Management provide outsourced credit control services
to get your invoices paid faster whilst protecting your customer relationship. We can provide a fully outsourced service or work alongside your existing internal resource. Working with TAK will improve your cashflow whilst allowing you to concentrate on your core business. Contact TAK for further details.