Effective debtors’ control is crucial for maintaining the financial health of any business. It ensures that the business has enough cash flow to meet its obligations
and invest in growth. Here are some strategies to manage and chase debtors efficiently:
Credit Policy: Establish clear credit policies. This includes setting credit limits, payment terms, and conditions. Make sure these policies are communicated to
your clients.
Invoicing: Ensure invoices are accurate and sent promptly. Use automated systems to streamline this process.
Regular Follow-Up: Implement a routine for following up on overdue accounts. This
can include reminders via email, phone calls, and formal letters.
Customer Relationships: Maintain good relationships with your customers. Understanding their financial situations can help you negotiate better payment
terms and avoid late payments.
Incentives and Penalties: Offer discounts for early payments and impose penalties for late payments to encourage timely settlements.
Legal Action: As a last resort, be prepared to take legal action to recover debts.
Ensure this step is included in your credit policy.
