If you have ever had to recover an overdue invoice from a difficult customer, you will know all too well know the process is rarely straightforward. This article will cover 3 harsh realities of the debt recovery process and will also provide guidance as to how best deal with such potential issues.
Debt recovery isn’t easy
In an ideal world, you would provide a service and the customer would pay what is due and there would be no need for a credit control function at all. However, this is not always the case and the process of recovering overdue invoices can be a lengthy and costly process.
In order to avoid such issues, you should act quickly. The sooner you contact the customer after their invoice becomes overdue, the more likely you are to collect the payment in full. To make your life easier, make sure you know exactly when each invoice becomes overdue so you can act quickly.
Customers do not always tell the truth
Collecting overdue invoices would be much simpler if all customers told the truth. However, some customers will do anything they can to stall or avoid making a payment.
As a result, when a customer gives you an excuse for a late payment it can be challenging to know if they are being genuine or not. Therefore, you need to be able to identify fake excuses in order to speed up the recovery process. One way of doing this is to have specific procedures in place to deal with the most common excuses.
Not all debts are collectable
Occasionally, no matter how efficient and effective your credit control processes are, outside forces can make some debts uncollectable. For example, if a customer experiences unexpected cash flow difficulty and enters insolvency as a result, it may be hard to recover the debts they owe.
The best way to prevent this happening is to get to know your customers and the industry they operate in before offering credit terms. There are various ways you can obtain this important information, including using account opening forms, performing credit checks and checking the Prompt Payment Code.
If you need any advice or have any questions relating to these issues please contact us on 03333200748 or email us at firstname.lastname@example.org.