Common credit and debt collection mistakes you should avoid
Posted: Mon Dec 23, 2024 6:16 am
There are errors in credit and debt collection that we still see today. Their persistence is worrying, since over time they can affect the company's finances and customer relations. Many of these errors can be avoided if we digitalize credit and debt collection management .
Although it is ideal for each area to have specialized software, such as credit analysis software for the first case and a debt collection platform for the second.
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In addition, it is crucial that debt collection managers and supervisors are buy uae database to perform their tasks more efficiently and to make the most of the use of these technologies.
What will you find in this text?
1. Not having credit and collection policies
2. Failure to comply with the provisions of credit and collection policies
3. Continue keeping a manual or software record...
4. Not resolving disputes with customers
1. Not having credit and collection policies
Any company that wants to venture into providing services or products on credit must have defined credit and collection policies . The former allow knowing which customer profile can be offered this benefit and under what conditions; while the latter will allow knowing what conditions the company will follow to collect the credit granted to customers.
Not having credit and collection policies is a weak point for any business, as this can lead to a lack of control and organization in credit management, which in turn can result in non-payments and significant financial losses. Without these policies, the company does not have a clear framework for assessing the solvency of its customers or a structured plan for debt recovery , which can cause cash flow problems and affect the stability and growth of the business.
2. Failure to comply with the provisions of credit and collection policies
It is of no use if the first point is clear if the stipulations of these policies are not complied with. One way to check this error, which is still common in both fields, is to review a company's accounts receivable , where it can be observed that many clients are not complying with the established payment deadlines or that credits have been granted to clients who do not meet the defined criteria.
This lack of discipline and follow-up in the application of policies can result in an increase in bad debts, a deterioration in the client portfolio and, ultimately, in liquidity problems that affect the operation and financial viability of the business.
3. Continue keeping a manual record or with traditional software of credits and collections
Currently, it is just as serious to continue using traditional methods to manage credits and collections as not having the aforementioned policies and implementing them.
Although it is ideal for each area to have specialized software, such as credit analysis software for the first case and a debt collection platform for the second.
5-Collect more, improve your collection management-banner
In addition, it is crucial that debt collection managers and supervisors are buy uae database to perform their tasks more efficiently and to make the most of the use of these technologies.
What will you find in this text?
1. Not having credit and collection policies
2. Failure to comply with the provisions of credit and collection policies
3. Continue keeping a manual or software record...
4. Not resolving disputes with customers
1. Not having credit and collection policies
Any company that wants to venture into providing services or products on credit must have defined credit and collection policies . The former allow knowing which customer profile can be offered this benefit and under what conditions; while the latter will allow knowing what conditions the company will follow to collect the credit granted to customers.
Not having credit and collection policies is a weak point for any business, as this can lead to a lack of control and organization in credit management, which in turn can result in non-payments and significant financial losses. Without these policies, the company does not have a clear framework for assessing the solvency of its customers or a structured plan for debt recovery , which can cause cash flow problems and affect the stability and growth of the business.
2. Failure to comply with the provisions of credit and collection policies
It is of no use if the first point is clear if the stipulations of these policies are not complied with. One way to check this error, which is still common in both fields, is to review a company's accounts receivable , where it can be observed that many clients are not complying with the established payment deadlines or that credits have been granted to clients who do not meet the defined criteria.
This lack of discipline and follow-up in the application of policies can result in an increase in bad debts, a deterioration in the client portfolio and, ultimately, in liquidity problems that affect the operation and financial viability of the business.
3. Continue keeping a manual record or with traditional software of credits and collections
Currently, it is just as serious to continue using traditional methods to manage credits and collections as not having the aforementioned policies and implementing them.