10 steps to prevent and manage late payments

Late payments can be quite tedious and time-consuming to recover. Here's some tips to prevent future late payments once and for all.

 

 

 

 

 

 

 

 

Account Management | Atradius

 

 

 

 

 

 

 


The secret of timely collections lays in the systematic and consistent credit management practices that should underpin your relationship with every customer. Dealing with late payments can be a tedious task, however it does not have to be. Protect your company’s cash flow and prevent late payment by following a few simple steps.
   

1.  Business contract

Clearly state your terms and conditions of trade and ideally get the purchaser to sign them with their order.

2. Constant watch-out

Run a credit check of prospective customers. However, these may not help when you run into trouble with past buyers. So keep constant watch for warning signs like slipping payments, round-number or unsigned cheques.

3. Bill promptly

Invoice correctly and as soon as possible. Ensure the pay-by date is clear.

4. Follow-up

Depending on the amount in question, follow up three days after posting your invoice and confirm whether they have received it and passed it for payment.

5. Overdue invoice:

On the overdue date, call and politely ask if there is a problem because payment is late and point out that interest is now accruing if necessary.

6. Documentation of calls

Keep notes of every conversation you have from now on and immediately fax the customer a summary after each call.

7. The cheque is in the post...

If they say they will put a cheque in the post, ask them to post it first class and allow three days before calling again.

8. The cheque is in the post...Again…

Ask them to fax a copy of the signed cheque to you as proof that they have written it and intend to pay. Alternatively ask them for the cheque number.

9. Pay a visit

If the company is local, call and request a meeting to discuss or possibly finalize payment.

10. Write a letter

Send the customer a letter drawing attention to your terms and conditions of trade and enclose proof of chasing payment.
   

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Disclaimer

The statements made herein are provided solely for general informational purposes and should not be relied upon for any purpose. Please refer to the actual policy or the relevant product or services agreement for the governing terms. Nothing herein should be construed to create any right, obligation, advice or responsibility on the part of Atradius, including any obligation to conduct due diligence of buyers or on your behalf. If Atradius does conduct due diligence on any buyer it is for its own underwriting purposes and not for the benefit of the insured or any other person. Additionally, in no event shall Atradius and its related, affiliated and subsidiary companies be liable for any direct, indirect, special, incidental, or consequential damages arising out of the use of the statements made information herein.