THE CLIENT provides collection receivables to THE AGENCE from time to time. THE CLIENT indicates that all accounts it provides to the AGENCE are legally due and due. On request, the CLIENT makes available the source documentation of the AGENCE for all accounts due and verification of the balance owed. The basic level of debtor strategy focuses on establishing clear contracts with your clients and implementing practical systems for managing these contracts. In your written contracts or agreements, you must indicate your payment terms, filing or storage conditions, or any criminal history you offer to encourage customers to pay before billing deadlines. Contracts should also define the parameters for starting work only after the contract has been concluded. As an additional level of protection, you should consider purchasing commercial credits or debtor insurance to protect your assets from losses and reduce future risks. Credit insurance protects you from the loss of your largest and most vulnerable asset – your A/R. While a basic dementia strategy defines the terms of contracts with customers and sets rules for payment or rebates, a defensive strategy sets conditions for customers who violate these conditions, resulting in overdue accounts that must be confiscated. While a fundamental strategy and defensive strategy focuses on the client after he or she has become a customer, an offensive strategy serves as a protective layer to assess risks before they occur. Setting up and managing systems and standards are essential to reduce your risk A/R.
Make sure invoices are sent regularly by sticking to a repeatable process. Call debtors before accountability data and take steps to correct non-payment the minute a debt is outstanding. Sending notifications on late invoices will help highlight the problem, and practice offers a valuable paper trail, so you`re ready if you need to degenerate later. Insert this documentation into the onboarding of new back-office employees. Effective debt management ensures that money owed by customers for goods provided or services provided is paid in a timely manner to the company. Effective debtor management improves the company`s cash flow by avoiding unpaid payments or late payments.