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Improve
Collection Performance
Credit professionals
must constantly look for ways to improve their department's collection
skills. Here are some ideas to reduce delinquencies:
- Make certain
your credit application and as well as your invoices clearly list your
terms of sale.
- Be sure
that your order entry department does not process purchase orders with
incorrect terms of sale until a written amendment to the P.O. is received.
- Pay attention
to how a debtor is paying other creditors. If you are being paid on
time while other creditors are not, it is unlikely your luck will last.
- Once an
account becomes seriously past due, before releasing any new orders
after the debt is paid the file should be updated and a decision made
about whether the customer still qualifies for open account terms.
- Try to
update each active customer's credit file at least once a year.
- Shorten
the time between the invoice due date and the first contact by the collector
to request payment.
- Attempt
to resolve disputes quickly. Always ask the customer to immediately
pay the undisputed portion of outstanding invoice.
Source:
Michael Dennis, author of "Credit and Collection Handbook" available
at the NACM Bookstore.
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