Current circumstances in the business in which we operate ask for constant improvement in both efficiency and effectiveness. So with low risk: no action – and if the risk goes up? Take the right action by the right person at the right time!
Start today! Consider not taking action more often and achieve more by dividing the energy and resources that you are investing into your credit management smarter:
1. Assess your current approach
How long ago did you implement your current dunning strategy? Is it still up-to-date? Taking a closer look at your processes and procedures regularly is bound to yield results. When are your actions planned, how many actions are planned? Are they planned at the right time and is the frequency and amount effective?
2. Plan intelligent actions
Adapt your actions to the size of your outstanding invoices. You should not spend too much of your time on chasing the small sums: an email is a quick and cost effective way to remind your customer of his outstanding invoice(s). For a larger amount you could consider sending a letter, this still does not take up much of your time is more formal and appropriate for the situation. If the sum of your outstanding invoices exceeds a certain point it might be wise to call your customer directly instead of mailing or emailing them. Investing your time to engage into a personal conversation will pay off in this case.
3. Plan focused/targeted actions
Segment your customers into groups based on a combination of information and criteria:
- Internal information (historic payment behaviour and complied appointments)
- External information (credit information)
- Risk level (based on history, industry, country)
- Divide your clients into profiles and adapt your dunning strategy to this.
4. Plan actions at the right level
Make sure to match a collector of the right level to the action that is required and the person that needs to be contacted. A combination of the invoice sum and clients profile helps to determine if a junior or senior collector should be responsible for collecting it.
5. Use pro-active actions
Consider planning an action before the due date of your invoices. This may seem to cost you extra care but could save you time in the long run. It is an opportunity to detect possible questions or queries about a delivery or invoice that might otherwise cause a delay of the payment. Segmenting and profiling your customers and combining this with a risk assessment can save you time and money. A regular checkup of your processes will prevent you from investing your efforts in the wrong things. If you focus on taking the right action for the right person at the right time you might find yourself doing nothing more often.
Contact or more information?
Contact us via: firstname.lastname@example.org, or follow @OnGuardGroup on Twitter to stay up to date.