A key element of your business is to have the right policies and procedures in place for debt collection. You should never try to cut corners when chasing customers for payment.
Some business owners feel that chasing customers for payment is likely to upset them and either fail to do it at all or do not have a proper strategy in place.
Either of these scenarios reflect badly on your business failing to chase customers promptly and appropriately, creates as negative a perception of your business as failing to deliver your goods or service.
Once you have delivered your goods or service to your customer, your credit controller should make a call checking all is in order, and the invoice/s will be passed for payment.
Record the content of this call-in detail to reflect with whom they spoke, the date and time, and that the customer was happy with the order, and payment will be made.
Make sure your credit control strategy sets out a timescale for sending invoices and statements and reminders.
Should the due date for payment come and go, call again, and if you can follow up by email.
If the invoice is overdue and the customer has not contacted you, make sure you send a chaser letter.
If the customer is making promises that they have not kept, make it clear that you now require full payment of your invoice/s. Do not let the customer delay matters too long.
The older a debt becomes, the harder it is to collect. Why haven?t they paid despite promises?
You should make sure you stick to the timescales within your collection cycle unless the customer raises a legitimate reason for non-payment, a dispute perhaps.
If not all of the debt is in dispute, press the customer to pay the undisputed amount. If they won’t, why not?
Follow your instinct in cases such as this. If you believe that the customer is using delaying tactics, set a short timescale for any contact/information, and if this timescale is not met, pass the debt to your solicitor immediately.
If you have the right legal partner, they will take over collection of the money due to you, and adopt the correct strategy to maximise recovery.
Jayne Gardneris partner and head of debt recovery at Corclaim.
