Business Debt Management Credit Control

Debt Avoidance

"I have always thought that prevention was better than cure. Give a man a
fish and he feeds for a day. Teach him how to fish, and you've
got him off your hands for the whole weekend"

Anything which leads to payment being withheld can be relevant to credit management. Often a client's own practice encourages this. We advocate self-help. We can give your business a 'check-up' advising on matters which can all have a role in cash flow. For example:

· Sales techniques
· Standard contractual terms
· Contractual performance
· Credit Control Training

Sales Techniques

Most businesses are sales-driven, naturally enough. It is a troubling fact however that most businesses which fail do so because of poor cash flow, not because of falling sales. It is equally important therefore to consider the importance of cash in the management of the business, and this can apply at all stages of the production cycle.

Any sales force needs to be aware of the impact that their selling can have on collection. If they misrepresent the capabilities of the product, or if they fail to reach clear agreement on vital elements, delivery time for instance, or if they fail to ensure that your terms are incorporated into the contract, then they are handing a collection headache to the credit control department. They need to know that the job is not done until the cash is in the bank. Often incentive schemes can work against the long-term interest of the company. Back to menu.

Standard Contractual Terms

Your terms of sale (and purchase for that matter) should be incorporated into the contract - putting them on the invoice is worthless, they need to be in front of the customer before the sale is concluded or they will not apply. We can advise how to achieve this and what your standard terms should contain. They will all help to reduce the opportunity for dispute and confer real protection in everyday situations.

There are various terms that no-one should be without. These include clauses protecting you in the event of delay, liquidated damages for cancellation, clear terms governing price and payment and interest for late payment, a term providing for UK jurisdiction, exclusion of liability for loss, restricting the time for complaint, a term creating retention of title may be important, and terms governing insurance during transit and transfer of ownership often help to reduce risk.

Terms governing sales over the Internet need to be particularly carefully drafted. Back to menu.

Contractual Performance

Nobody is going to pay for a product which does not comply with its description or for a service which fails to live up to their expectations. If you must give credit therefore, you must ensure that your internal procedures rigorously enforce quality. Do not rely on complaints as a measure of quality. Typically a disgruntled customer will not complain - they will merely move their custom elsewhere and advise all their friends to do the same. Back to menu.

Credit Control Training

We can provide credit control training to staff wanting to become more effective or wanting to understand how the law relates to their job.

We can help them understand the difference between a company and a partnership, what happens when a business changes hands, what to do if a customer goes into liquidation. We can explain the objectives in taking a matter to court and illustrate best practice, how to minimise cost and how to tackle the day in court.

We can also advise on the principles and essential techniques which need to be incorporated into your system. We can write your standard letters, advise on the timetable and help to equip your staff with responses to typical scenarios. We can discuss with management whether the system is rigorous enough, whether going soft on your best customer is a good idea if they are not paying you. Back to menu.

Why not call for a quote on 01273 403935 or e-mail details to: jastbury@astburys-law.co.uk