Often the difficulty in collections is only a symptom of underlying problems within the business, and as we peel back the layers to expose the true cause of the problems, a number of interesting facts emerge.
Over the next few weeks I will address these issues and suggest possible solutions you can implement in your business immediately. As the title of this article may suggest the difficulties are not in the complexity of the business but in the complex systems that develop over time if they are allowed to develop organically rather than being a set of planned out processes. Most of the real problems lie in some basic errors and shortcuts that have been taken. Some occur because of a lack of understanding of the total business and some others because of a lack of knowledge of the credit function.
The headings we will cover in future articles are:
- Opening New Accounts
- Master file Maintenance
- Documented collection procedure
- Risk Assessment
- Cash Controls
- Sales involvement in the Credit function
- Dealing with queries and disputes
- Having clear Credit Terms
- Having a working Credit Policy
- Clear and simple documentation
- Cash Allocation
- Your business working as a single unit
- Internal Communications
- Cash Flow forecasting
- Realistic bad debt provisioning
- Write off controls
- Action based reporting
Over the next 18 weeks these articles will build into a valuable resource for your business and can become a central part in establishing your policies, your procedures and your controls.
If there is an area you would like to see included, under one of the headings above or a different heading completely, please let me know, I am always delighted to get your suggestions and act on them.
Of course if you can’t wait for 18 weeks to get the answers to your questions, you can contact me to arrange a training session or a one to one consultation where I will analyse your issues and give you a simple action plan to implement. You can get me on my mobile 087 244 7052.