If you are having problems collecting money due to you the these steps may help you:
·Get your list of customers, and decide on the worst performing 10%, on the basis of days it takes to collect cash from them.
·Eliminate customers from this list that you cannot afford to lose – perhaps they buy a lot of goods or services from you, or the profit margins on the sales to them are better than average.
·Pick out the worst offender still on the list and target them to collect from them as soon as possible. If you do not get a quick result, consider passing them on to an outside agency for collection or legal action. They will not take up any more of your time, and you may still collect through an agent.
·At the same time target the next few offenders on the bottom of the list to improve their cash collection. They should know that you intend to collect from them sooner rather than later, and let them know that the next step is to send their accounts to an outside collection agency. If after a month you still haven’t collected some or all of these accounts, pass them to a collection agency. Again, they are not taking up any more of your time, and you will not be making any more sales to them thereby increasing the debt.
·The troublesome customers must realise that you are not worried about losing their business, and when that hits home, they may improve their performance.
·Now use the time you used to spend chasing overdue accounts to market your business and get profitable customers that will pay on time. Set you credit terms out at the start and stick with them for all new customers.

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