Improve Your Chances Of Getting Paid

2. Improve Your Chances of Getting Paid — August
Improve Your Chances of
Apply Proven Credit Management Techniques 2009
Getting Paid — Apply
Proven Credit
Management Techniques As important as making a sale is, getting paid for the goods or services
CMI Shows Growth for you’ve sold is of greater importance. This can be awkward territory, but How can you find out
Sixth Consecutive Month there are “golden rules” to credit management that every business should how financially risky a
— Is End of Recession follow. potential buyer or
Near? supplier is in advance?
Second Quarter 2009 First and foremost, before providing credit facilities in a new business-to-
CEO Economic Outlook business transaction, check out the buyer’s ability to pay. Bank references Do you know why trade
Survey Results are not foolproof but do help. Similarly, credit risk assessment agencies credit insurance is
National Domestic can be employed. Your trade credit insurance provider, e.g., Atradius, can superior to letters of
Receivables Report almost always give a reliable creditworthiness appraisal. Where large sums credit — even in
Summary are involved, examine the buyer’s company accounts. If practicable, visit today’s economy?
the customer for a face-to-face meeting.
Join Us: Trade Show and Do you know how
Event Calendar Set out your terms and conditions of trade clearly on order
to enhance the
acknowledgements and invoices. Include details of any interest charged on
creditworthiness of your
overdue accounts. For non-perishable products it is essential in your terms
foreign receivables?
to retain title to unpaid goods so that in the event the buyer goes into
receivership, you can at least reclaim your products.
For answers,
Invoice promptly and accurately, making clear the due date. Send please contact
statements at least monthly. Depending on the amount of money at stake, Eileen Jackson
follow up three days after sending the invoice to make sure the customer is at 1-800-822-3223.
happy with the product or service. Confirm they have received the invoice
and passed it for payment. Don’t delay going after overdue accounts.
Phone on the first working day that the payment is overdue and ask if there
is a problem. Follow up politely but persistently with phone calls and letters.
Dealing with late payment excuses
"The check is in the mail”
Ask for the check number, the date it was signed, the name of the person
who signed it and when it was mailed. If they haven’t sent payment they
won’t be able to answer those questions.
“The person who signs checks is away”
Find out what arrangements have been made to sign salary checks and
pay utility bills. Often, some signed checks will have been left to settle
important accounts. Persuade the person you are dealing with that your
account is important and the absent boss would want it to be paid.
“We’ve misplaced/not received your invoice”
Offer to e-mail or fax a copy immediately. If they don’t agree to pay within a
couple of days they are effectively admitting that this is a delaying tactic.
“Our computer is down”
Tell them you’ll be happy to receive a check written the old-fashioned way.
You’ll even send a courier for it.
“We’re waiting for payment from a large customer”
Ask for details of the debtor and when payment is expected. Suggest they
obtain credit from their bank on the security of this debt.
The only valid reason for nonpayment is not having the money. If your
customer is genuinely strapped for cash negotiate firm but fair staged
payments, possibly obtaining post-dated checks. Forcing a company into
bankruptcy is a last resort because a long line of other creditors will almost
certainly have prior claim to any assets. Watch for warning signs like
slipping payments, round-number payments “on account,” and checks that
have “accidentally” been left unsigned.
Document every conversation you have with a defaulting customer. In your
correspondence simply state the facts and don’t display anger. Draw