20) Specify the most appropriate payment method: cheque/electronic payment/credit.
Invoicing
21) Check the accuracy of all invoices sent out.
22) Include the following on all invoices:
- Your bank details.
- Terms and conditions of sale.
- Name of the organisation you are trading with.
- Address for payment.
- Order number.
- Order description.
- Delivery date.
- Unit price.
- VAT number, amount and rate.
- Total amount due.
- Due date for payment.
- Payment terms.
- Discounts given.
23) Issue an invoice within 24 hours of delivery of the goods or services.
24) Check that your delivery is in line with the order to avoid invoice disputes.
25) Confirm receipt of invoice for large accounts.
26) Issue monthly Statements of account showing invoices paid and still outstanding.
Collection
27) Divide your customers into Good, Average and Bad, and set a Collection Policy for each category.
28) Properly allocate payments against specific unpaid invoices.
29) Phone major accounts before the due date of payment to ensure there are no disputes and that the way is clear for payment to be made on time.
30) Chase overdue payments within a week of them being due.
31) Conduct an aged debt analysis each week.
32) Prioritise your collection activity and chase the highest values first.
33) Levy a charge for “bounced cheques/direct debits”.
34) Use a set policy for further chasing, for example, standard letters, calls, faxes, visits referring to Solicitors or a Debt Collection Agency.
Recovery
35) Consider stop supplying when payment has not been made by a set time past the due date. Have a different stop policy for different categories of customers.
36) Put the matter in the hands of a Solicitor or Debt Collection Agency. Agencies: (www.intrum.ie, www.cashflowservices.com)
37) Pursue the claim through the Courts.
Management
38) Have documented procedures including timescales for handling and resolving disputes.
39) Establish a system for measuring the success of your credit control function. Establish “tight but attainable” targets. Best measurement is Days Sales Outstanding (D.S.O.)
40) Have a regular monthly review to identify problem accounts and define courses of action.
41) Have regular meetings with your sales team.
42) Ensure your staff are well trained eg: trained to prepare, listen, question, persuade and negotiate.
Source: Institute of Certified Public Accountants in Ireland (CPA), www.cpaireland.ie