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Chase outstanding bills ASAP
This is perhaps the most important tip of all. Always concentrate on the largest debts first, customers you suspect maybe in financial trouble and older accounts. Keep a log of your calls the date, time, who you spoke with and what was discussed. Do not be embarrassed about requesting payment never forget it is your money. Phoning is one of the fastest ways to persuade late payers to pay up but never call on Monday or Friday. Build a relationship with the accounts clerk and never be rude or lose your temper.
Deal with excuses
Always be sceptical of excuses they can often be simple delaying tactics. Put these customers high on your chasing list. Have a standard policy on dealing with common excuses, for example:
"I haven't received your invoice" - send another copy by fax/email to the person you spoke to and phone to check it has been received and when you can expect payment.
"I'll deal with it shortly" ask when it will be dealt with exactly
"The cheque's in the post" ask for the cheque number and postal date. Check the invoice address is correct
Consider stop lists
A stop list is a list of customers you do not want to give more credit to. Update your stop list regularly and do not supply any more goods to customers on the list until they have paid their accounts up to date. Inform late payers that they are 'on stop', encouraging them to pay up, especially when they realise they want to place further orders.
Send seven-day letters
A seven-day letter is the first stage of the legal process you cannot sue unless you have sent your debtor such a letter. Some businesses have a policy of not paying until they receive such a letter.
It's good to talk
Maintain a positive and personal relationship with your customers. You are more likely to get the results you want if you adopt a friendly approach . Explain that you value their business and have been advised to take legal action, but only want to do so if there is no alternative. Speak to the managing director or finance director of the business, or another decision maker if possible.
Finally, thank customers who pay on time.
About the author
Tim Bishop is a partner at solicitors Bonallack and Bishop whose services include a nationwide specialist debt recovery department offering a free solicitor's seven-day letter.
Visit www.bishopslaw.com for more information, including free downloads on avoiding employment tribunals, avoiding identity theft and a free downloadable recorded seminar on credit control or telephone 01722 422300.
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