BPPG launches new credit management template

The Better Payment Practice Group (BPPG) has launched an online ‘Estimate Letter’ template on its site www.payontime.co.uk as part of its continuing campaign to help small businesses implement efficient credit management practices.

The free, easily downloadable letter template may be used by businesses when writing to potential customers to provide them with an estimate.

In addition to notifying the customer of the estimated amount that would be charged for a piece of work or for the supply of a product, the BPPG’s estimate letter also asserts the authority of the seller’s terms of trade and users of the template are advised to print their terms of trade on the reverse .

Peter Rowe, Director General of the ICM and member of the BPPG, commented: “Good credit management practice starts before the point of sale. This estimate form will help businesses secure new customers while at the same time clearly outlining their credit terms. Too often businesses overlook the need to put good credit management in place at the outset, and then suffer the consequences of bad debt.”

The BPPG advises businesses to develop a basic and practical credit management system for:

• Securing and opening credit accounts;

• Establishing the identity and credit worth of the customer;

• Collecting cash on time.
  

These systems need to be supported by good documentation, including:

• An estimate form;

• A credit account application form;

• Letter confirming the opening of an account – and the credit limit;

• Invoices/statements;

• Collection letters.

Terms of Trade should be drawn up by a solicitor familiar with the business and its market place.

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