Systems For Debt Collection

The end of financial years has well and truly come and gone, well done if you have come through the year with out having to write off any debts.
However there are many businesses that this is not the case and now is the time start to plan for this financial year. 
Remember time is money and the longer you leave money outstanding the more it costs. 

Many businesses operate on an over draft, so if you have outstanding debts you can add the cost of your overdraft to this and it is disturbing to think about the amount of profit that’s eroded away by not getting the money collected quickly. 

Good resources are needed to collect outstanding money, if you don’t have a system for collecting debts, now is the time to start, whether you decided to create an in house system, use a formal debt collection agency or a combination of both it is important to have a system in place. The important factors in creating a system

1. Daily review of debtor’s ledger. Each day make a list of accounts that have become over due and update those accounts that have been paid. Set priorities for those accounts that need to be followed up. 
2. Action for each debt that is overdue. Create a system for how this is managed by either using reminder letters or follow up phone calls. 
3. Payment arrangements. Ensure you have a process to track accounts that are being paid off, to prevent confusion for both debtor and credit controller. Keep a diary of contacts with customer. 
4. Consistent processes. Follow up on your customers and be consistent with you method of collection. 
5. Use a professional. If you don’t have the skills or resources to be professional in collecting outstanding accounts pass it onto a licensed collector. 

Having the right tools and resources is imperative to ensuring a smooth collection process, the balance between maintaining customer relationships and collecting outstanding accounts is very important and sometimes a very fine line. 

However if you have a consistent approach, your customers will get to know your system and before long will adhere to your credit terms automatically.

Contact Bouvard Collection Agency