These days, giving credit should be an informed decision. The effects of bad debt write-offs can be devastating for any type of business but particularly for SMEs and start-ups. Yet sensible credit granting can help expand sales enormously so it really pays to be sure your credit management system is fit for purpose!
Why not see how you rate with the CPA Credit Management Health Check tool
Do you have a credit control person or department with specific responsibility for assessing credit applications?
Do you credit check new customers to ensure they can meet their financial commitments?
Do you monitor existing customers for adverse changes that may affect their ability to pay their accounts?
Do you realise how expensive write-offs are and their effect on turnover?
Do you appreciate credit reports can be positive and assist your turnover?
Do you make a provision for bad debts in your accounts?
Do you recognise that if you give credit, then having no bad debts at all probably means you are missing out on business by being over cautious?
Do you adhere to a strict credit control procedure?
Are you sending invoices and statements out as soon as you can?
Are your credit terms clearly shown on all paperwork including Quotations, Pricelists, Invoices and Statements?
Do you know how much money is overdue at any one time?
Is your internal credit control system cost effective and working well?
Have you determined the amount of working capital required to finance credit sales?
Do you know the average number of days it takes to collect one day’s credit sales?
Do you regularly prepare and analyse credit management reports from your Sales Ledger?
Do you regularly prepare and update cash flow forecasts?
Do you have an action plan to deal with debtors in financial difficulties?
Are you aware of Government legislation and initiatives designed to aid the collection of overdue accounts?
All CPA members receive a full written money-back guarantee, underwriting the cost effectiveness of the Overdue Accounts Recovery service.
Protect your profits by avoiding write-offs
Maximise cash flow by obtaining prompt payment whilst maintaining goodwill
CPA can take whatever action is needed to reach a conclusion