Controlling and Collecting Debts
Controlling and Collecting Debts Checklist 1. Remember that prevention is better than cure
As mentioned above, effective credit management policies and procedures can help to minimise the risk of overdue payments. In addition consider steps which may be taken to minimise the possibility of bad debts. Decide who will operate your policy. Some of the options include: a factoring agency a lawyer or agency providing access to standard stationery your own colleagues - either dedicated exclusively to debt collection, or acting as part of the accounts control or credit team. Be aware of any relevant legislation. In the UK for example the Late Payment of Commercial Debts (Interest) Act 1998 and the 2002 and 2013 regulations amending it, make provision for companies to charge interest on outstanding debts after a certain period of time has elapsed.. The legislation is intended to deter late payment and penalise late payers. systems which detect arrears and potential bad debts early good communications between departments, especially sales, accounts, credit control and debt collection colleagues with appropriate specialist knowledge and good interpersonal skills regular reviews of policies, procedures and criteria for granting or extending credit firmly applied policies with regular reviews to ensure that debt collection procedures are implemented immediately when appropriate regular training or refresher courses in interpersonal skills, for example, in developing an assertive, but sympathetic manner. 2. Review organisational systems and procedures There will be a need for:
Future Practice Owner.
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