Spending time and developing good processes to minimise risk as your business grows is a must for any business.
These processes begin at engagement with your new client. Have you checked their credit worthiness…CRB’s Credit Reporting Bureaus or Agencies are a good start rather than checking with their supplied referees?
Ensuring you have up to date terms and conditions which are specific to your business practises are crucial. They must also include a default clause so that costs of debt collection can be added to the debt. This will give you an edge over other suppliers for payment. E.g., your business has consequences for not paying on time e.g. Telstra account or discount for paying utility bill on time.
Do you have a dedicated Accounts Receivable Manager or team skilled in debt collection who understands the importance of this task? Is there a time frame that they follow? Are they familiar with the process to escalate a debt?
Do you use a credit reporting bureau to monitor “at risk” clients? We can provide credit reports and offer this service for you for a small fee (starting at $30 plus GST)