Controlling and Collecting Debts
Controlling and Collecting Debts Checklist
3. Concentrate on big debts
Remember that 20% of your debtors probably account for 80% of the debt outstanding at any one time. An even smaller percentage is involved in bad, or potentially bad, debts. Pursue the big debts first and remember that, while it may be easier to collect the smaller sums which are overdue, this may not necessarily be the best approach.
The effectiveness of debt collection should be assessed by the amount of money recovered and not by the number of debts collected.
Bear in mind, however, that: several smaller debts can add up to one large debt for a large debt a phone call before it falls due may be appropriate for a small debt the process may start with a letter one month after payment is due debts are seldom as simple as a single invoice or one month's transactions - they usually involve many transactions with invoices and credit notes over several months.
Future Practice Owner.
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