How to reduce the chance of bad debts

The best way to reduce bad debts is an efficient credit control system. Try the following tips:

• Make sure you credit check all customers before you give them credit terms.
• Create rules around how much credit your business will provide and to which customers.
• Avoid giving any customer more credit than you could afford to lose if the sale turned into a bad debt.
• Send out invoices immediately after you have supplied the goods or service. Confirm there will be no problem paying it by the due date.
• Monitor late payments and chase them up methodically, largest debtors first.

Using a debt collection agency, or a specialist lawyer, can be an effective method of dealing with non-payers.

There are also software solutions that talk to your accounting software. Get in touch with us to find out more details.