Can you look me straight in the eye and tell me:
- I have a new account application form on file for every single customer with an outstanding balance on our debtors’ ledger.
- I have assigned a specific amount of credit I am prepared to give to every single customer.
- I have a written Credit Policy that is a live document that everyone is aware of and adheres to
- I have clear credit terms that are communicated to everyone internally and externally and they are strictly adhered to.
- I get all the necessary information at the start and on an ongoing basis.
- I get information on judgments every week
- We have been in contact with every single customer who has an overdue balance and we know when the payment will be in our bank.
- We know every one of our customers and are happy we can fully trust them with the amount outstanding.
- We send out invoices on a daily basis and they are always correct.
- We never have price queries.
- The goods that are ordered, delivered and invoiced always match.
- We have trained and educated staff who know exactly what they are doing.
- We have a clear collection process in place for each category of customer
- All our staff work together as a team for the common good.
- We never have to send out Credit Notes
- My bad debt levels are appropriate for my Industry
- My Days Sales Outstanding are below average for my industry sector
- My credit function is better than the sales team the way they care for and look after our customers.
- All my people are working to their strengths and get to spend their time doing the things they love to do.
- Stress is not an issue anywhere in my organisation.
- We have clear reports every week and month that are easy to read and deliver the exact information we need to manage our business effectively.
If you answered yes to most of the statements you are still doing well
If you answered No to any questions the good news is that over the next number of weeks I will share with you a strategy to deal with each of these issues. If you can’t wait that long and you know the longer you wait to do something about clearing the older balances, the less you are going to collect, maybe it is time to have your own “Operation Transformation” on your ledger – call me directly or email me and I am happy to help in any way I can.
Credit Management may not be an exact science – there is a way – The Credit Coach way – that really works – keep reading and learning.