Top tips on staying in control of business debt

1. CREDIT CHECKS
It is no good closing the stable door after the horse has bolted. Always assess risks when taking on new business by attaining correct information from the new client and then get a report from your Credit Reference Agency. Remember that a client’s company circumstances can change in a very short space of time so ensure you make regular checks
2.  CREDIT LIMITS
Set Credit limits for all accounts and stick to them rigidly – no exceptions
3. TERMS AND CONDITIONS OF SALE
Ensure you send new clients your terms of trade before you give them a service or send them a product and certainly before giving any credit. Include a clause for adding interest to the outstanding account if payments are late which should be a good incentive to get payment on time
4. SET TIME ASIDE TO CHASE OVERDUE ACCOUNTS 
Send out your statements at least on a monthly basis.  Send out invoices at the same time as you send out the goods or provide the service. Remember that the sooner the invoice is in the sooner you will be paid
5. CHASE OVERDUE CLIENTS BY TELEPHONE
As soon as your invoice becomes overdue, chase it by telephone. Try to build up a rapport with the person who pays the invoices. Don’t be afraid to ask which invoices are being paid, when and by what method.  Internet or Bacs payments seem to work best. If at all possible it is best to deal with the same person each time you contact your client and make sure you keep notes of what was said
6. CHECK DETAILS 
Your invoices should be correctly addressed, and include order numbers or reference numbers, to avoid problems down the line
7. DEBT COLLECTOR
You should consider using a debt collection company once you have exhausted other options
Finally, if you do find yourself in a position where you have debt collectors visiting your business, it is important not to panic and bury your head in the sand. Debt collectors only make a living from people who won’t pay their debts as opposed to those that can’t pay their debts. They will therefore be keen to work with you to find out a solution that works for everyone. 
For more information on JBW Group go to: www.jbwgroup.co.uk

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