The key to your cashflow is the managing of your debtors from day one here are some key points which should assist you:

• Have clear terms of trade so your clients know when payment is expected. Remember that the terms of trade to comply with the Fair Trading Act must be disclosed to your potential client before they agree to using your services or buying your product(s). The terms of trade must be clearly displayed - on your counter ,on quotation / patient / credit application forms. To allow the adding of collection costs / administration fees to the debt this must be disclosed in the terms of trade.
• Ensure new clients complete fully the relevant information forms i.e. new patient or account application forms make sure you check that they have completed in particular address, phone numbers (try and get at least two contact numbers), date of birth and contact person details. This information will help you and the debt collection agency in collecting the debt. Note if a potential client claims to not have any contact phone numbers take this as a warning.
• Make sure your client information is regularly updated i.e. phone no’s ,contact person etc.
• If you have doubts over the identity of the potential client ask for some form of photo identification i.e. drivers licence this can also be used to check spelling of name and date of birth etc.
• Have set procedures when dealing with overdue accounts i.e. reminder letter sent at 14 days overdue, phone call at 21 days overdue etc. Have a set timeframe when you will stop credit and make sure you review your debtors on a regular basis.
• Once a debt reaches 60 days overdue it should be handed to Global Credit Management. The sooner we can get involved in the recovery of the debt the more likely that the debt can be collected. Remember cashflow is king so don’t let those clients with overdue accounts use you as their bank.