Good credit control starts long before you get on the phone to chase overdue accounts. You can dramatically reduce the chance of disputes and bad debts by being aware of the risk from the moment they first become a customer. The damage has already been done by the time you raise your invoice unless consideration has been given to some key areas first:
- Credit and background checks on new customers
- Annual reviews of existing customers
- Clear and concise terms and conditions for all customers
- Clear and precise order, despatch and sign-off system
If you have a clear record that the customer has received exactly what they ordered, fully in line with terms and conditions that they have agreed, then disputes are going to be significantly reduced.
If you have taken every step to ensure the financial security of the customer then bad debts are going to be significantly reduced.
Now, you complete your defenses by having a robust system of credit control aimed at managing the payment of every invoice and you have an effective system for ensuring your hard work is properly rewarded.