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Credit Management Advice > Quick step guide
Use the right methods to collect overdues
Action Follow up
Visit Very large accounts at intervals. Phone twice per month
Phone All large accounts, largest first in the first week of each month.
Use diary for follow-up within same month. Escalate job holder if normal contact fails
Letters To all not phoned. Send to named contact. Sign personally.
Only two standard letters: polite first reminder and strong final demand.
Design letters better than those you receive at your own firm.
Fax Use when being ignored on phone or letter.
Send to senior person, not failed contact
Statutory Demand Send 21 day notice of intention to have customer wound up.
Only when all standard efforts fail. Only large undisputed debts.
Threaten Third Party Steps State threat on final demand. Can use collection agency; solicitor; court action
Warning! Statutory 21 day demand and legal action will lose the customer. Before starting, try MD to MD contact.
Set targets, deadlines and priorities

1. Decide total cash needed by month-end deadline.
2. Use wallchart to plot daily progress towards target.
3. Have monthly campaign to clear up different types of debts.
4. Consider staff incentive - just like sales - for exceptional collection performance.

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Use third parties sooner rather than later

If standard efforts fail, the customer won't pay until severely threatened. Don't delay! Use collection agency for undisputed debts below certain value 3 months overdue. Use solicitor for strong letter to try to avoid proceedings. Use court action if debt is undisputed and exercise your right to interest 

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If debts are truly uncollectable? write them off
and learn from experience

 

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