Keep Your Customers’ Credit Under Control

The Better Payment Practice Group has launched a new credit management letter on this website.

The free, easily downloadable letter template may be used by businesses when establishing a new credit account to acknowledge receipt of the customer’s application for credit.

The letter fulfills several key objectives:

• Ensures that credit terms are communicated clearly and concisely to the customer at the outset of the business relationship;

• Provides the opportunity to introduce the customer to the credit manager or individual who will be handling their account;

• Most importantly, the letter [which is to be signed and returned by the customer] serves as a means of obtaining written confirmation that the customer agrees to abide by the credit terms set out by the supplier.

The new template is the latest addition to a suite of debt collection letters that have been launched recently on the site to provide businesses with advice on how to compose invoices and effective reminder letters.
Professor Robin Jarvis, Head of Small Business at ACCA, commented, “The provision of a credit facility to new customers should only be agreed once thorough vetting procedures have been carried out. If a customer is deemed suitable, businesses should then agree their Terms and Conditions with the new client.

“By being clear about the terms of credit at the outset and by obtaining written acknowledgement of those terms from the customer, businesses can effectively minimise the risk associated with credit provision, and ensure that control of the payment arrangements remains in their own hands.”

You can keep up to date with the Better Payment Practice Campaign by sending us an email