Having effective credit management policies and procedures in place is critical to the bottom line of any business. Inefficient cashflow often comes about as the result of poor credit practices combined with a lack of understanding of how to maximise cashflow and minimise risk.
An integral part of having sound credit practices and procedures is ensuring, for example, that:
- You have credit documentation in place;
- You have verified customer information provided in credit documentation;
- Trade references have been provided by your customers, and that these referees have been contacted;
- You have trading terms and conditions in place to effectively protect your business;
- You have identified any business arrangements that give rise to PPSA security interests in your favour, and have taken appropriate steps to perfect and update these interests;
- Your credit staff are conversant with the ACCC Debt Collection Guideline for Collectors and Creditors and work within its parameters in dealings with customers;
- You have considered and taken any necessary guarantees from directors of your customers;
- You review credit limits granted to customers and act promptly should these be exceeded, or require variation;
- You understand the effects that bankruptcy, insolvency and various insolvency administrations will have on your customers, and what this subsequently means for you; and
- You obtain assistance in debt recovery to recover unpaid debts from recalcitrant customers.
Protecting your business interests is one way to both minimise risk and maximise your cashflow. Coleman Greig’s Credit Management team can assist you with this by providing expert advice, and working alongside your business to:
- Develop and implement effective credit policies and practices;
- Prepare credit applications and guarantees;
- Review and update your Terms and Conditions of trade;
- Review contractual agreements with your customers and suppliers;
- Manage both the timely pursuit of recalcitrant debtors and the minimisation of debtor days;
- Clarify how the information gathered from customers can help you in implementing cost effective debt recovery procedures;
- Clarify the effect that a customers voluntary administration, liquidation, bankruptcy or receivership is likely to have on your business; and
- Set up registrations on the Personal Property Securities Register (PPSR).
For more information, or to make an appointment at one of our offices, please select from the below: