-
Credit Control – Too Soon?
I am sure we all have the same problem with cash flow, thankfully we’ve put a number of customers on pro-forma with only a number of larger trade accounts still on credit.
We’ve one account in particular where they take liberties, and currently owe is around £4000, most of which is now overdue.
I’ve always been lax when it comes to credit control, but have set our accounts up to send firm, yet polite reminders when accounts are overdue, with the threat of passing the account to out debt recovery company who add 15% +VAT to their debt, and do all the hard work :thumbup2:
We’ve rarely used it, but as we’ve got busier and busier we’re owed more & more money.
How long over payment terms would you think is ‘reasonable’ before unleashing the Debt Recovery Company on them?
-
7 Replies
-
how much do you want them as a customer?,
The minute you send in a recovery firm, kiss bye bye to the customer, You might get paid but it’ll be the last bit you’ll do for them,
Try getting the ball into your court,
Wait for another order coming in, Hold till it’s needed and just before it goes out tell them you’ve just realised that their account is seriously overdue and get a payment off them for it as your Bank wont let you exceed a certain credit limit,
That way at least it freshens up the debt and you can concentrate harder on them , -
Relationship has deteriorated recently with this one customer, as a job the did regularly for us, we’ve moved to another printer, as when the customer reduced the quantity they almost doubled their price.
We’ve not heard from them in almost 3 weeks, and I know they’ve had some financial issues recently with a number of their customers going bust, and they’ve recently forked out moving to new premises (after being chucked out their old premises)
Sounds to me like the writing is on the wall that all is not well with them…
-
Just remembered I posted this here.
Last month said customer entered administration… shortly followed by liquidation by the administrators.
They pocked just shy of £11,000, whilst everyone else can swivel for their money.
Ahhh well, the joys of being in business.
-
Sad times David, sorry for the loss although it’s becoming more and more common these days.
Hopefully you will bounce back from this a little tougher and wiser.
I keep a lot of my clients on a short lead, in some cases 14 days.
And larger jobs, I insist on a part payment upfront to cover material costs etc just in case they pull the plug at the last minute.
Much as you have to keep the client sweet, you don’t have to be held over a barrel.
If they are not prepared to be reasonable, then your better off without them -
Ive started taking payment up front for jobs under £200. Anything more I now ask for a deposit for materials. So far no one has complained. I had really quiet start to the year and it was the only way I could keep the business going.
-
The history with this one particular customer goes back over 25 years, with my dad & uncle working with him, they even bought his business out many years ago.
I had a feeling something wasn’t right… it could have been much much worse.
-
With my larger customers i know i will be paid but unfortunately on their terms normally 30/60/90 days. This isn’t too bad as i do work for them regularly so payment every month. All other customers i invoice with payment within 7 days. If it goes past 3-4 weeks i email them a reminder and a few days later i call them and chase over the phone. In twenty years I’ve only once had a company fold on me. Im sorry to hear you’ve been stung, I hope you bounce back.
Log in to reply.
