A collection is a sensitive topic in any company, especially in terms of internal organization. In fact, who is responsible for this and who should take care of this mission? Finance Who knows debt, but not necessarily a client? A sales team that knows its customer well? In fact, no one likes to raise. Nevertheless, this is a fundamental problem, the impact of which on the economic health of your business is obvious. Introducing best practices is the key to developing a “cash culture” in her organization and her clients. The collection process should be considered as an integral part of the company’s development cycle. Upstream, analyze your future partners. Then set up a structured process to track receivables. And finally, to master a lawsuit in case to show your determination and your severity. We hope that this excellent collection guide will help you optimize your receivables management in general.
Debt collection. And sometimes it’s better to know how to lose commercial investment by denying a client than to suffer from non-payment and all its economic consequences. In addition, the rule of good governance requires a proactive approach to this issue before facing a client insolvency situation. It is important for your company to create vigilance tools to determine the ability of your future customers to pay you, that is, establish an analysis of customer risks and a policy for managing them.
Step # 1: Establish a credit analysis policy. This policy is based on a thorough study of the creditworthiness of your customers, which is defined as a credit analysis. Because, as a bank, you “lend” to your customers 30 to 60 days of your potential cash. Thus, as a bank, it is normal to collect a certain amount of information related to your future client. And depending on this study, you can also establish a specific logic of the loan: payment terms (payment periods, advance payments), guarantees (late transfer of ownership, deposit), payment method (direct debit, letter of credit …).
Of course, this approach is more or less advanced, depending on the importance of the client’s contribution to your business and the risk that you are ready to take with you. Debt collection. Do not waste your time with minimal customers. You can be vigilant about withdrawing money, especially with innovative tools like the Dunforce platform. Define criteria that your sales teams must necessarily integrate or not include in their efforts. The clearer your policy is for everyone, the easier it is to implement and use risk management. The simplest thing to do is create a data collection file with a certain amount of supporting documents. This is a simple but complete client profile that can provide key information.
Business debt collection company. Tip: You can justify yourself by referring to the fact that your bank will take care of some accounts. This questionnaire for the client is presented with a certain number of points, from the simplest (company identification data, such as company name, VAT number, etc., required for invoicing) to the most immodest, asking to send a balance sheet and income statement. Of course, ask for evidence of the existence of the company (extract from the database). And if the interlocutor executing the order is not displayed, this means a confirmation of commitment to delegation.
This questionnaire is based on your business sector and the risks that you have previously encountered for certain types of clients. Hence the importance of maintaining a payment history with each client. Do not forget to add to this file the information provided by the commercial team in contact with the client. Interesting places: the size and variety of customers, the main business sector, business hours, trust in the company, quality of the premises, serious contacts, discussion of prices and conditions.
You can always get these products in court registries or on websites. But more and more companies do not publish their accounts and do not ask for confidentiality, considering this information strategic. There are also providers who can provide you with a detailed analysis of your potential customers with a rather expensive subscription. In general, these are certainly reliable sources, but often outdated, because they are based on reports that can be dated. In the same vein, there are companies that also sell credit insurance.