If your business involves giving credit, for instance while a service is being provided – or for a period after the sale of product(s) or service(s), then you need to consider a Credit Control Management strategy. For example:
- Is the sale by credit really necessary?
- Carry out a credit check on the Customer and set a credit limit if possible.
- State clearly at quotation/pre- commencement stage what payment and credit terms apply.
- Can you minimise your credit exposure by use of deposit payment or a stage payment system?
- Establish clearly what payment terms are stated in the debtors/customers purchase order.
- Strictly apply your credit terms. (don’t encourage ‘slippage’ by inaction)
- Be prepared to use legal resources for debt recovery if necessary.
Please Note:
All information provided is for general knowledge purpose only and should not be used in your decision making process. When making decisions all businesses should obtain independent advice and counsel.
