What is Credit Management?
The main goal of Credit Management is to convert claims and demands into available liquidities at the best of our ability. To approach good management we need to take the following items into account:- Organisation of your management.
Entrust the management to someone who possesses both capacity, time, professional knowledge and competence.
- Know your clientele.
If possible, gain stronger insight in the creditworthiness of your customer before the salesman encounters him in a meeting.
- Clear terms of payment and general conditions.
Clearly agree on the terms of payment with your customer.
- A good monitoring of with credit limits.
You need to create boundaries/credit limis for each client on the total amount of the outstanding balance, to which no extra deliveries or delay of payment is granted.
- A clear procedure regarding the reminder process.
React immediately in case of exceeding the term of payment. This reaction can of course differ from client to client. Create a clear procedure for the different stages of the reminder process.
- The debt collection agency.
Don't postpone contacting a debt collection agency in the case of default of payment.
In the last few years, debtor or credit management become a very important part of the business world. And rightly so, because although payments are the final link in transactions, they remain the most important aspect of business for the selling party. A paid sale is more important than a gained sale.
Good credit management doesn't only gain the enterprise a great deal of money and improves liquidity, but it also plays a crucial part in a mutually appreciated cooperation with the client.
C&J Credit Services can be of service to you on these matters.