Debtor Management Procedure and Process
Having a clear Debtor Management Procedure and starting the process as soon as a sale is made is essential to maintaining good cash flow. Statistically, the probability of collecting a debt drops between 60 and 90 days to around 73%. By 180 days you have only about a 50% chance of collecting at all.
By the time an Account is 90 days overdue, if a debtor actually intends to pay you, you should at least have made a payment arrangement in relation to the debt which is being performed. If you don’t, waiting any longer is usually a mistake.
How to prepare a Debtor Management Procedure
A Debtor Management Procedures is simply a documented procedure setting out when follow up or reminder letters, emails or phone calls are to be made in relation to an Account and which template letters or emails are to be used. The development of template follow up or reminder letters or emails culminating in a Final Notice is to any effective Debtor Management Procedure.
A good Debtor Management Procedure should be simple to understand and followed strictly by staff. A Sample Debtor Management Procedure can be found on page 7 of our Guide to Better Credit Management. For best results we recommend businesses refer debts to us for collection between 60 and 90 days. We also offer a free Final Notice Letter Template. If you have any questions or require any assistance, please feel free to contact us.
Current Overdue Accounts
If you already have debts more than 90 days overdue, what are you waiting for? Debt collecting is a competitive sport – if you’re not getting paid someone else probably is. Often the creditor making the most noise will get paid first. Let us make that noise for you. It’s what we specialise in.
An effective Final Notice or Overdue Account Letter is an essential component of every business’ Debtor Management Procedure.
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WeCommunicate personally handles all large claims. We have 20 years of business and negotiation experience, closing over $500 million of transactions all over Australia.