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On a phone call, you should provide a summary of the amount pastdue, such as “$10,000 over 30 days pastdue” or reference one or two large pastdueinvoices (number, amount, and due date), but no more. The key issue is securing a commitment to pay the pastdueinvoices.
Collectors spend most of their time asking for payments While it is true collectors are constantly requesting payment of pastdue balances, once that request is made they end up spending most of their time resolving disputes and invoice discrepancies. Learn More About Credit Reports 5.
When we first think about creditrisk, our minds focus on the financial status of the company in question. To manage the risk that a customer might default, companies implement credit and collection policies and procedures. Your Virtual CreditManager is a reader-supported publication.
Your Virtual CreditManager is a reader-supported publication. Do you need help assessing your customers’ creditrisks? The experts at Your Virtual CreditManager have default risk probabilities and other financial benchmarks for analyzing your AR portfolio and revealing actionable insights.
Hopefully, that gets you past the emotions so you can have a rational discussion about getting paid Habitual debtors repeatedly default on promises and usually have a history of slow payment and defaults. These account provide a serious creditrisk, and should not be approved for open credit terms. annualy, forever.
Selling only to financially strong customers reduces the risk of bad debt loss, (and the cost of Credit and Collections activity required). Most companies, however, need incremental sales volume from higher-credit-risk customers to break even and achieve profitability. it just might help them pay you sooner!
Subscribe now The Problem with AR Clutter In a perfect world, your AR Ledger would contain only whole, current invoices; or at least nothing seriously pastdue. Invoice balances that remain unpaid 60 or 90 or more days beyond their due date are not providing any benefits.
To continue reading and learn how to recognize O2C shortcomings along with seven critical factors for AR success you must be a paid subscriber to Your Virtual CreditManager. Do you need help assessing your customers’ creditrisks?
Share How to Clean Up Your AR Ledger Launch a collection program to collect all pastdueinvoices at least 15 days late. Match as many unapplied payments and unapplied credit memos to open invoices, deductions, and debit memos as possible. For more on the importance of periodic credit reviews, click here.
Creditriskmanagement also plays a huge role in the O2C process—a loose credit policy is likely to be accompanied by lagging customer payments and an increased risk of bad debts, while tighter credit controls can result in profit opportunities being missed. Do you need help improving cash flow?
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