Maximize Your Collections<br />Crucial Steps for Proactive Credit Management<br />Presented by Michelle Dunn<br />
What is Credit Management?<br />Management of business credit, A/P & A/R<br />Policies & procedures regarding payments<br ...
Objectives<br />Payment options<br />Setting credit limits<br />To eliminate bad debt<br />Collecting money<br />Dealing w...
A Credit Policy Must:<br />Be tough & flexible<br />Offer specific guidelines for action<br />Be enforced!<br />
Credit & your Customers<br />Be fair, reasonable and follow the law<br />Protect yourself & your business<br />Always chec...
Extending Credit<br />Credit applications<br />Fill out & sign<br />Keep original & give customer a copy<br />Check all re...
Extending Credit<br />Make it Easy<br />Make it Quick<br />Make it Painless<br />
Credit Risk<br />To Minimize your Credit Risk:<br />Get a personal guarantee<br />Offer month-to-month credit<br />Offer s...
When checking references ask:<br />How long have you known the customer?<br />How long have they done business w/ you?<br ...
When checking a bank reference ask:<br />Is this a business, personal, savings or checking account?<br />When was the acco...
Credit Management Skills<br />Understanding of credit applications <br />Understanding of state laws, FCRA & the FDCPA<br ...
What’s in a Credit Policy?<br />How to apply for credit<br />Late fees, interest fees, collection, court or bad check fees...
Correcting debt collection mistakes<br />Enforce your credit policy<br />Research the debtor or past due customer<br />Ask...
How much credit is enough?<br />Do they pay their other bills on time or late?<br />Are they always past due?<br />Is ther...
Quick Fix!<br />1.  Print out Credit Applications<br />Give one to every customer<br />Have it filled out and signed<br />...
When a customer is past due<br />Refer to your credit policy<br />Make a collection call<br />Send a friendly reminder<br ...
Change bad habits<br />Review your A/R Weekly <br />Collect as much money as possible<br />Stay focused, deal with excuses...
Resources<br />Free Credit Applications<br />www.MichelleDunn.com/free.html<br />FDCPA – www.ftc.gov<br />FDCPA e-course –...
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Maximize your collections

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Power point presentation about how entrepreneurs and small business owners can maximize their collection efforts, limit their credit risk and get paid when customers become past due.

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Maximize your collections

  1. 1. Maximize Your Collections<br />Crucial Steps for Proactive Credit Management<br />Presented by Michelle Dunn<br />
  2. 2. What is Credit Management?<br />Management of business credit, A/P & A/R<br />Policies & procedures regarding payments<br />A plan for revolving credit customers<br />Guidelines for collecting money<br />A Streamlined system for contacting customers<br />Avoiding bad debt<br />
  3. 3. Objectives<br />Payment options<br />Setting credit limits<br />To eliminate bad debt<br />Collecting money<br />Dealing with past due customers<br />
  4. 4. A Credit Policy Must:<br />Be tough & flexible<br />Offer specific guidelines for action<br />Be enforced!<br />
  5. 5. Credit & your Customers<br />Be fair, reasonable and follow the law<br />Protect yourself & your business<br />Always check all references<br />
  6. 6. Extending Credit<br />Credit applications<br />Fill out & sign<br />Keep original & give customer a copy<br />Check all references<br />Determine & set a credit limit<br />Send customer deny or accept letter<br />New Customer Packets<br /> 1. Credit application<br /> 2. Credit policy<br />
  7. 7. Extending Credit<br />Make it Easy<br />Make it Quick<br />Make it Painless<br />
  8. 8. Credit Risk<br />To Minimize your Credit Risk:<br />Get a personal guarantee<br />Offer month-to-month credit<br />Offer ship-to-ship credit<br />Get a security deposit<br />Get a 50% deposit on every order<br />
  9. 9. When checking references ask:<br />How long have you known the customer?<br />How long have they done business w/ you?<br />What payment method do they use?<br />Do they pay within terms, late or use discounts?<br />What is their average monthly orders?<br />How often do they order from you?<br />What is their balance due now?<br />Is any of that past due? How much past due?<br />What are your terms with them?<br />Do they make any returns?<br />
  10. 10. When checking a bank reference ask:<br />Is this a business, personal, savings or checking account?<br />When was the account opened?<br />What is their average daily balance?<br />Have they had any NSF or other returned checks?<br />Do they have any outstanding loans?<br />What types of loans?<br />Are the loans unsecured or secured?<br />Are they current on loan payments?<br />
  11. 11. Credit Management Skills<br />Understanding of credit applications <br />Understanding of state laws, FCRA & the FDCPA<br />Communication skills<br />Negotiation skills<br />Skip tracing/location skills<br />Mediation skills<br />Organization skills<br />Patience<br />
  12. 12. What’s in a Credit Policy?<br />How to apply for credit<br />Late fees, interest fees, collection, court or bad check fees<br />Repayment terms & conditions<br />Credit limits<br />Buyer responsibilities<br />Seller liability<br />
  13. 13. Correcting debt collection mistakes<br />Enforce your credit policy<br />Research the debtor or past due customer<br />Ask for payment immediately<br />Research & retain a debt collection agency so when the time comes you are ready<br />
  14. 14. How much credit is enough?<br />Do they pay their other bills on time or late?<br />Are they always past due?<br />Is there a seasonal pattern?<br />Is the poor payment because of marital issues, the economy or employment issues?<br />What are their anticipated monthly purchases?<br />Will they pay COD while you make a decision?<br />
  15. 15. Quick Fix!<br />1. Print out Credit Applications<br />Give one to every customer<br />Have it filled out and signed<br />Check ALL references<br />Decide if you want to extend them credit<br />
  16. 16. When a customer is past due<br />Refer to your credit policy<br />Make a collection call<br />Send a friendly reminder<br />Send a not-so friendly reminder<br />Revoke their credit<br />Follow up!<br />
  17. 17. Change bad habits<br />Review your A/R Weekly <br />Collect as much money as possible<br />Stay focused, deal with excuses firmly<br />
  18. 18. Resources<br />Free Credit Applications<br />www.MichelleDunn.com/free.html<br />FDCPA – www.ftc.gov<br />FDCPA e-course – MichelleDunn.com<br />FDCPA e-book – MichelleDunn.com<br />

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