- If you grant credit to a limited company, make sure the company is solid. A company check costs £5.If any doubt, get a director’s personal guarantee.
- It is always wise to try to get a couple of trade references where possible.
- Have good credit control procedures in place and ensure they are acted upon. Monthly statements, red letter reminders and follow-up phone calls are all effective in getting debtors to pay promptly.
- Always get the debtor to agree a date as to when you can expect payment. Follow-up immediately if the payment is not received when expected.
- Consider if you can really afford the risk in issuing further credit while there is a current debt outstanding.
- Consider a repayment schedule where appropriates. Follow-up immediately if the payment is not received when expected.
The main thing to remember is that if a customer does not want to co-operate or if you smell a rat, take precautions to protect your own business. Chasing debt is business – it’s not personal!