The Save Money / Make Money Seminar Series

MBSL launched its Save Money / Make Money Seminar Series in the Dublin Chamber offices, Dublin 2 on Wednesday 3^rd February. Running monthly throughout 2010, This series of breakfast seminars has been created to provide business owners with insights, tips and solutions to the two greatest issues facing business in Ireland today – Saving money and making money.

It is a genuine effort to provide independent insight in order to support and invigorate business in this difficult economic climate.

The first topic discussed was ‘Credit Control Strategy with a legal perspective.’ A number of important points were presented and discussed amongst the group in attendance.

Below is a summary of 10 top tips to reduce your debtor days.

10 TOP TIPS TO REDUCE YOUR DEBTOR DAYS.

1. Terms and Conditions.

It is very important to have clear Terms and Conditions of Sale. Clearly print your terms and conditions on quotations, contracts, order confirmations, delivery dockets and on the reverse side of invoices. Ensure that they allow you to charge interest on late payments.

2. Retention of Title Clauses.

Utilise Retention of Title clauses in your Terms. The title of goods supplied should be retained by you until full payment is received from your customer. You should advise your customer that the clause forms part of your contract.

3. Invoice Content.

The clarity of your invoice is important. Stick to the basics in the information you provide and avoid unnecessary clutter on the document so that the details are clear.

1. Customers company or business name
2. Customers order number
3. Invoice date
4. Full product/service description
5. Delivery date and method
6. VAT number and VAT applicable
7. Payment terms
8. Payment due date

4. Credit Checks

Never extend credit to a customer without carrying out a credit check. Design a ‘Credit Application Form’ and ensure that each potential new customer completes it. Check bank and trade references, along with other sources, such as Credit Safe and Vision-net, for company background / viability.

5. Credit Limits

Set credit limits and ensure that your accounting system prohibits sales when limits are exceeded. Also offer small credit limits if your customer’s credit rating is poor.

6. Check Payment Histories Regularly

If your customer pays consistently on time, consider increasing their credit limit. This is a low risk way of increasing business with them.

If your customer’s credit limit is exceeded or there are late payments, then provide no more goods or services until terms are met.

7. Follow Up

Issue your invoices within 24 hours of delivery. Confirm your customer has received their invoice. Also it is worth considering “pre-dunning” – call your customer before payment is due to confirm that there is no reason for nonpayment.

8. Systematic Approach

Establish a systematic approach to issuing statements, sending chasing letters and calling customers. Keep copies of all correspondence and notes about telephone conversations, and follow up promptly on any broken promises!

9. Debt Collection Policy

Have clear debt collection policy. Ensure that the staff involved in debt collection are thoroughly trained and, critically, there is a consistency in the method of debt collection. Hold internal credit control meetings and measure collections on week by week basis.

10. Legal Action

If all else fails, refer your account to an outside agency. However you should only consider legal action as a last resort. Using the court system to collect debts can be tedious, stressful and expensive.

So remember…

An ounce of prevention is worth a pound of cure!

If you have any questions in relation to the area of credit control, please contact us.

The full presentation from the first seminar in the series is available on our website to download here.

The next seminar in the series on 3^rd March will be ‘Effective Tax Planning for your Business.’

Click here for details.