The cash flow of the company can be seriously hit if the customers fail to pay their dues. There are many occasions when the customers may fail to make payments, take corona for instance. A businessman must be effective at squeezing money from those who owe it to the company.
Even though there are laws that establish it as a legal right of the creditors to collect money, what course of action can be taken to collect the money is also restricted by laws. Thus, your strategy has to be carefully planned to be successfully acquiring what rightfully belongs to you.
One of the best ways to secure your business against the buyer’s failure to pay the dues is credit insurance. One of the best Credit Insurance Australia is Niche Trade Credit. They are experienced in managing different businesses for over 30 years. Their services have been benefitting many businesses and it is time that you too get benefitted by them.
How to improve the debt recovery process
1- Study the customers before expending credit- this is a very important step, which many companies tend to forget. You must know the background of the customer before taking the leap of faith. Always give credit to only those customers who have been doing business with you for a long time and have shown responsible behaviour.
2- Maintain a record of how much is owed and when was it expended- the exact date and the amount of what credit you extended is essential for you to recover it effectively. There should not be any discrepancy in the records lest it will create problems in the recovery. You can use any of the databases and update them on a regular basis.
3- Be upfront with the payment methods and penalties- all the conditions like the payment method and the penalties must be decided before the transaction takes place and must be documented so that at the time of payment, no confusion takes place.
4- Incentives at instant payments- the sooner you receive the money, the better it is for the company. You must always promote early payments in the form of incentives, discounts or money-back offers. This will positively affect the cash inflow and will ease your debt problems.
5- Get the terms in writing and signed by both parties- if push comes to shove, you will have to pursue legal action against the buyer to procure your credit. For this, you will have to have some documentary evidence that corroborates your claim. That is why terms and conditions in writing and signed are very important for successful recovery.
6- Assign the task of collection to a debt collector- it takes a lot of loads off your shoulders if you make one person responsible for recovering the outstanding dues. The debt collector takes the onus of the recovery process and makes the process hassle-free.
Conclusion
Debt recovery is a herculean task, but if you follow certain caveats, it can be made much easier.
Lawnow 