We all start the new year with resolutions in different areas of our lives. The credit and collections department cannot be ignored when setting your objectives and resolutions for the new year.
TransCredit has put together a list of recommended resolutions to help your business increase its cash flow:
Establish Recovery Goals and Objectives
To establish recovery goals and objectives for the year, it is extremely important to review last year’s results and analyze your past due receivables. In analyzing your past due receivables, we strongly recommend identifying factors that generated the aging of these accounts. Was the appropriate paperwork not sent to the broker or their factoring company? Was there an unresolved claim or dispute on a load? Were there charges on your invoice that were not included in your signed rate confirmation? Any hiccup can cause the payment of your invoice to be delayed, or even worse, not be paid at all.
Establish Your Credit and Collections Policies
If your company is granting credit without a guideline to follow, it means your company is granting credit and performing collection activities based only on experience and premonitions. To change this, establish credit verification guidelines and make this standard business practice for you and your employees. While sending out reference sheets for internal verification may be sufficient in some instances, keep in mind that companies will only provide you with their best references. No one is ever going to list a company they did not pay as a reference!
Review Your Credit and Collections Forms and Templates
Review the layout and content of your current company templates. Meet with your credit and collections team and invite your sales team as well. Your sales staff is usually your first line of communication with your customers and they probably have built rapport with your clients who have now become debtors. You will be surprised at the improvements you will be able to incorporate into your templates. Having clear and concise invoices and collection demand letters should also clear up any confusion regarding what a customer is being billed for.
Report All of Your Clients – Good and Bad Payers
As your clients learn that your company reports payment experience to third-parties, whether a credit bureau or an on-line directory, they will set a priority status when scheduling your payments. Unfortunately, many debtors prioritize payments based on how much is owed and whether or not they feel the debt will negatively impact their ability to continue doing business.
There are several options to report your aging (payment experiences). Many involve fees but some are free of charge. TransCredit has been one of the primary business credit agencies for over 35 years and we allow companies to submit their aging files at no cost. We also offer discounts on our credit reports and freight bill collections services when you submit your aging file on a monthly basis! Give us a call today to learn more about our products and service.