Credit Management
Getting It Right From The Start
Processes Matter
Credit management is important for businesses because it keeps cash flowing and helps avoid financial headaches. When companies manage credit well, they can get paid on time, which means fewer worries about bad debts. Plus, it helps build solid relationships with customers, showing that the business is responsible with money. Put simply, good credit management is key to keeping a business growing and stable.
It's not just about measuring risk and collecting cash though, there are a number of principles and good practices that need to be considered which are discussed below.
Know Your Customer
KYC (Know Your Customer) checks are crucial for ensuring compliance with regulatory requirements and preventing fraud. These checks involve verifying the identity of your customers through documents such as government-issued ID, proof of address, and other relevant information. Additionally, important to assess the risk level of each customer by understanding their financial behavior and transaction patterns. Conducting thorough KYC checks not only protects your business from potential legal issues but also fosters a safer environment for all customers, enhancing trust and credibility your operations.
Know Your Customer
KYC (Know Your Customer) checks are crucial for ensuring compliance with regulatory requirements and preventing fraud. These checks involve verifying the identity of your customers through documents such as government-issued ID, proof of address, and other relevant information. Additionally, important to assess the risk level of each customer by understanding their financial behavior and transaction patterns. Conducting thorough KYC checks not only protects your business from potential legal issues but also fosters a safer environment for all customers, enhancing trust and credibility your operations.
Collections Policy
Implementing a collections policy for debt collection is vital. It establishes a clear framework for managing unpaid invoices effectively and ensures that your operations run smoothly. This proactive approach minimises the risk of disputes with clients and fosters transparent communication, setting clear expectations for all parties involved. Ultimately, a strong collections policy is essential for maintaining financial stability and driving business success.
Do you have one? When do you start chasing for payment? How do you deal with disputes? When do you stop supply?
If your company doesn't have a clear collections policy how do you expect your credit team to function to the best of their abilities.
I can help you devise a policy from client inception to legal action.
