Credit Control – Policy and Management
Useful for: Business
In Brief
- Develop a credit policy that will support the cash flow needs of your business while also meeting the market demands of your customers – “will I get this sale at all if I don’t extend credit”?
- Explore taking security if you really must extend credit to a customer that is a credit risk.
- Chase debts promptly and regularly but having regard to the ongoing relationship with your customer (if there is one). Sometimes a stick is necessary, but if you value the ongoing relationship or the customer is a referrer/influencer in your market, it will always be preferable overall to reach a negotiated outcome.
- Prevention is far better than cure – having to institute debt recovery proceedings can often result in expenditure of time energy and legal fees for no actual result.
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