Credit professionals must constantly look for ways to improve their department’s collection skills. Here are some ideas to reduce delinquencies:
- Make certain your credit application and as well as your invoices clearly list your terms of sale.
- Be sure that your order entry department does not process purchase orders with incorrect terms of sale until a written amendment to the P.O. is received.
- Pay attention to how a debtor is paying other creditors. If you are being paid on time while other creditors are not, it is unlikely your luck will last.
- Once an account becomes seriously past due, before releasing any new orders after the debt is paid the file should be updated and a decision made about whether the customer still qualifies for open account terms.
- Try to update each active customer’s credit file at least once a year.
- Shorten the time between the invoice due date and the first contact by the collector to request payment.
- Attempt to resolve disputes quickly. Always ask the customer to immediately pay the undisputed portion of outstanding invoice.
Source: Michael Dennis, author of "Credit and Collection Handbook" available at the NACM Bookstore.