Controlling and Collecting Debts
Introduction
All businesses need to control debt including ensuring that debts are paid and paid on time as late or non-payment of debt can be a major source of cash flow problems. The implementation of effective credit management polices (See the related checklist Controlling Credit) can help to pre-empt problems, but it is likely that all companies which extend credit to customers and clients will, from time to time, be faced with situations when payment is overdue. The point at which this becomes problematic is a matter for individual decision and may vary depending on industry or sector, but it is clear that excessive levels of debt can lead to stress for managers and financial difficulties for the business. Controlling debt and debt recovery is not an easy task, but it is an issue which must be faced. Effective processes for controlling debt and following up on outstanding debts will help organisations to ensure payment of as much of possible of the monies owing and reduce the likelihood of financial difficulties. This checklist outlines sound principles for action.
What is Debt Control?
Debt control is a strategy and a series of processes and procedures adopted by organisations in order to recover money owing to them after credit has been extended to customers or clients for goods and services.
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