After several unsuccessful attempts at communicating with clients, you’ve finally decided it’s time to outsource your company’s debt recovery tasks. You give out a sigh of relief because someone else will be in-charge of this time-consuming and stressful process.
Before you hand over the unpaid invoices, though, there are some credit control tasks you must take care of first. This will help increase chances of successful recovery and reduce the instances of late- or non-payment in the future.
Here are crucial credit control tasks you must do before outsourcing debt recovery:
Double-check your invoice
It’s probably been some time since you last reviewed your invoice. Take a good look at it now and determine if there are aspects that need to be updated. Start with the design of your invoice. Does it clearly state the credit terms? Is there a space for stating what the invoice is for? Do you list the different payment methods you accept? Is the payment deadline displayed prominently?
Consider comparing your invoice against others that you’ve received to see if you can come up with a better template. Also, make sure your invoice has the 9 must-have elements that promote prompt client payments.
Review your credit policies
Your credit policies play an important role in the success of your debt collection efforts. They are essentially guidelines that inform clients when and how to pay you as well as what happens if they fail to send payment on time. It’s crucial to assess these policies regularly and update them whenever necessary. Effective credit policies are those that clear, precise, and easy to follow. They should also meet the needs of your business without being unfair to your clients.
Before you forward outstanding invoices to a debt collection agency, take a moment to go over your credit policies and make sure you followed all the steps. Make a note of any aspect that might be causing payment delays and find out how you can improve it in the future. Also, identify any important conditions or clauses that might be useful to debt collectors.
Go over your sales ledger
Another crucial credit control task you must check off your to-do list is reviewing your sales ledger. Ideally, this should be done on a regular basis, allowing you to keep track of all invoices and client accounts.
Before you hire third-party debt collectors, give your sales ledger a last-minute review to make sure you’ve identified all unpaid invoices and aged debts. This way, you can deal with all the debts all at once. Expert debt collectors can help you determine which invoices can still be recovered and which ones you’ll need to write off.
Run credit checks on long-term clients
In these erratic economic times, a company’s financial position can change very quickly. One day your client’s business is doing well and in the next, they might be facing insolvency. This is why it’s important to run credit checks not only on new customers, but also on those that have been with you for a long time.
By doing this, you can have a more updated picture of how your clients are doing financially and allow you to make appropriate adjustments to the credit you offer them.
Time to Call in the Experts!
Now that you’ve completed these crucial credit control tasks, it’s time to call in the professional debt collectors. Slater Byrne Recoveries is the highest ranked debt recovery agency in Australia. We specialise in recovering debts that no one else can! Call us today on 1300 794 290 to find out more about our services.
Liam White joined the Slater Byrne Recoveries team in early 2013. He has worked across the credit & dispute resolution industry for a number of years. He is currently working in a Marketing/Head of Sales capacity at Slater Byrne Recoveries.