Tip of the Day: Debtors Tricks of the Trade
Debtors Tricks of the Trade
The old expression “a sale is never made until you’ve collected the cash” is as true today as it ever was.
Here are some ways you might hedge against commonly used reasons for non-payment:
Only extend credit if you need to
These days, with credit and debit cards readily available, there is much less need to extend credit. So think carefully before you do.
Faulty Product or Service
- Have a clearly defined and simple warranty program on your invoices and relevant paperwork.
- Clearly state on your invoice and delivery paperwork that the customer must confirm claims to you in writing within a reasonable period (e.g. 7 days)
Timely Invoicing
- Produce and send your invoices as soon as possible, preferably with the goods or services delivered
- Send invoices by email with a read receipt, or by facsimile
Purchase Order Number
Make sure you get this with the order confirmation, don’t send goods or deliver services without it.
Credit Application
Make sure you have a Credit Application form prepared and signed off by your customer prior to trading
- State your trading terms and conditions, including payment period (7, 14, 30 days from date of invoice, not end of month), default provisions e.g. interest rate payable on outstanding accounts in your Credit Application form and invoices/statements
- Talk with your local collection service regarding appropriate wording that the customer is liable for all and any fees and charges associated with retrieval of your money
- State the goods remain your property until final payment is made, and that you have the right to reasonable access to retrieve the goods should they remain unpaid for
To seek professional advice on the above before you incorporate these recommendations. For relevant contacts email: accounts@norbec.com.au or phone 02 6622 1933.
December 16, 2011 at 12:53 pm 10 comments Business Advice
10 comments
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