When things have gone awry
From time to time businesses struggle to get paid on time (or at all!) by their customers. From time to time they need the dispassionate approach that only an independent party can bring to the discussions. We are happy to step into that role and act as the "bad cop" so that you can remain on good terms with an otherwise good client.
We have many years experience of debt recovery utilizing the tools of the law and the insolvency options where necessary. We can avoid the costs that can quickly build up with repeated solicitor letters and we can bring the direct and personal touch, visiting you customers at their premises if need be.
Preempting the problem
Why do you give credit? This may sound like a dumb question but it is important for businesses to remember that credit is a privilege not an entitlement; it's a concession on your part to a customer you hope will be a good, long-term and profitable purchaser of your goods or services. Do not give credit without going through proper checks and do not forget to monitor your customer's account regularly.
At Assentive we help our clients make informed and well researched decisions by providing them with the tools they need including:
- Detailed credit account application forms;
- Searching questions to ask of trade referees;
- KPI measurements to monitor ongoing account performance;
- Policies, procedures and staff training to ensure compliance with company policy.
Remember CAMPARI? It's what bankers are taught about the principles of lending:
Character - who is the entity to which you are giving credit? What history do they have? Who runs the business?
Ability - can they pay the money when it falls due? How long is their sales cycle?
Means - are they dependent on the next sale to be able to repay you? Do they have resources?
Purpose - more relevany for bank lending perhaps but check that they are not using your credit line to fund something they shouldn't;
Amount - be careful not to offer too much credit too soon. The customer should prove to you that they are creditworthy;
Repayment - how long are you going to give them? How will you monitor them in the intervening period?
Insurance - banks frequently take security for their loans. If you have doubts or start to worry about your customer then ask for a director's guarantee.
Remember: you are agreeing to provide a little time for a customer to pay; you are not making a risky decision to invest your money into their business....or are you?
If you would like us to conduct a short review of your processes and systems with no obligation to take it any further then do not hesitate to contact us.