Effective Collection Practices
By BuildMyBiz on December 17th, 2012
In today’s difficult business environment, having an effective collection strategy in place is imperative to having a short DSO and healthy cash flow. Building this foundation is the fundamental challenge many companies are faced with as there are multiple facets to building a strong and robust collection strategy. These range from credit controls, contact matrices, dispute management processes, and Service Level Agreements (SLAs) to policies covering the nature and process of escalating payment demands.
Why not just continue to write off those bad debts? What hits the bottom line of your costs ultimately requires growth to the top line in sales. So we’d like to provide you with 4 steps to help make your collection practices as effective as possible and improve your cash flow.
- Have Everyone Complete a Credit Application
Your credit application should also include your “Terms of Agreement”. Included in this should be such things as… Read More
Create and Document Your Collection Process
Designing and implementing a vigorous contact strategy or “treatment matrix”, which includes… Read More
- Include a Dispute Management Plan (Won’t Pay)
Like a good collection strategy, a good dispute management process will have… Read More
- Know When to Ask for Help (Can’t Pay)
No matter how effective your credit and collection process is, you will still have… Read More
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Granted, developing these processes and training your team and their counterparts throughout your organization takes time and effort, but is sure to save you significantly in the long run. Utilizing these steps can also help you avoid reaching the point where pre-legal or legal litigation is necessary, however with appropriate discretion, it may be imperative to utilize this final collection tool as well.
Read the rest of Effective Collection Practices.
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