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Questions & Answers

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DIARY ENTRIES

  • Debit Notes. Friend or Foe?

    Customer .. read more

  • The secret to getting paid!

    Probably, the question that I am asked most often is, 'what's the secret to getting paid on.. read more

  • Retention of Title, the difficult one!

    ROT! Utter ROT (Retention of Title) and some people look at you blankly. We all know w.. read more

  • Can't pay? Won't pay?

    When it comes to getting paid there are three types of Customer. Those who pay in an a.. read more

  • Small business being hit for six!

    It's really quite sad to note that the majority of calls coming into the office so far.. read more

Questions & Answers - Credit Control

If you have any questions about Credit Control within your Company then ask them here and we'll try to answer them for you as soon as possible without charge.
 
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  • Q: A customer of ours agreed to pay us by regular weekly instalments but sometimes the cheque and then we don't see another one for weeks. How can we make him comply with the plan that we agreed?.

    A: I'm assuming that you're saying that sometimes the cheque arrives and then you don't see another one for weeks? It's pretty obvious that you have talked the situation through with your Customer and decided upon a plan that suits you both. To 'finalise' this agreement you should have written to your Customer making it clear that they have agreed to pay £ xxx on each and every Friday for xxx number of weeks starting on a certain date. You should also have made it clear that, if any payment does not arrive on that agreed day you WILL, immediately and without further reference to them, take legal action to recover the debt in full plus costs and interest. That way you both understand where you stand from the start and what will happen if the agreement is not kept to. If you have problems with this give me a call and we can talk about it further - no charge!
  • Q: I have just finished reading you latest diary article on cant pay wont pay. I had a customer today whos cheque bounced. When I rang him he said that his bank had made a mistake. What do I do with him?

    A: I've lost count of the number of times that I've heard this one but NEVER has it been proven. I dream of my Bank making this mistake because I could retire on the proceeds of the compesation they would have to pay. Ask for a letter from his Bank confirming what has happened. It won't appear. Sympathise with his dilemma and insist that his Bank make payment direct to your account immediately. That's unlikely to appear either. Put the account on stop until you are paid in full then close it. Stopped cheques, bounced cheques and irregular payment patterns are all warning signs that should never be ignored.
  • Q: We have a customer who is pleading poverty and wants to pay his £6500 bill by monthly instalments of £250. I think he’s got the money but is just messing us about. How can we find out and what else can we do?

    A: I have checked out the Company in question and find that I have had 'dealings' with one of the Directors before, albeit it with a different business name. So, yes, I think that your instincts are probably correct. They have no CCJs on record so I suggest that you send them a letter sympathising with their predicament but saying that, unfortunately, you have been let down before when entering into such arrangements. Say that you would give their offer serious consideration were they to put in forward in response to a County Court claim that you will issue for them in 7 days time. Experience tells me that that they will be able to find your money by then. If you want a draft of a letter that I use then mail me at davidg@djcreditcontrolsolutions.com and I'll send it over.
  • Q: I've enjoyed reading your diary articles but do you have any tips for making our Customers pay us faster? Sorry, but our cash flow is suffering and we can't wait until you get to that part of the credit control process!

    A: To answer this you need to ask yourself the question, 'Why are our Customers paying us slowly?' There are a many answers that could help explain this and improve your collection performance. For instance: Do you have a lot of unresolved disputes? Are the people involved in your Credit Control properly trained? Are your collection procedures effective? Is your credit policy tuned to your industry sector and the current financial climate? Are you giving credit to the right people? Is your administration strong and are you able to supply your Customers with the information they need? Or, are your Customers simply taking advantage of your good nature and paying other Suppliers who ask 'properly'? At times like these you need to be firm but fair. Your Customers would soon complain of you delivered their order a month late so why should you have to wait a month longer for payment?
  • Q: Our biggest customer is refusing to pay us because it's their financial year end. Can they do that and how do we stop them?

    A: Of course it's not right but this is a practice that has been on the increase over the years and is totally wrong. You need to speak to them and, probably, beg for your money. Tell them you can't pay your staff, you can't pay your Suppliers, you can't pay your tax, you desperately NEED this money. I am assuming here that this is a BIG Company trying to protect its balance sheet and not someone who has a cash flow problem.
  • Q: We have a Customer who insists on deducting Debit Notes from their payments. We have asked them not to but they continue. What can we do to stop them?

    A: We would recommend that you work with your Customer in respect of debit notes. After all, would you rather they withhold payment of a £2000 invoice or issue you a £50 debit note and pay you £1950? Address and resolve their dispute quickly and there should not be a problem. If you still have troubles then please contact me direct at davidg@djcreditcontrolsolutions.com and I will help you further.