A Privilege

 

While credit is a convenience to the buyer, it is also a privilege extended by the seller.  Providing this privilege gives the seller the right to establish and enforce the rules of their collection policies.  If you are lax in enforcing your own rules, your customer may take this indifference, as permission to delay payment and assume that time of payment is not important.  Establishing and enforcing a strict credit policy may take time, but it can eventually be accomplished.  Old customers who may have always been slow will have to be educated in stages, but new customers can, of course, be more easily indoctrinated to your terms and credit policies.

 

If your customer has presumably been told when payment is expected, there is no reason to make excuses or be ashamed to ask for your money when it is due.  Now is the time to be courteously firm.  Asking for money that is due you does not have to be embarrassing or unpleasant.

 

Collection practices vary and many systems are successfully used (forms, personal letters, phone calls, sales representatives – all depending on the age and condition of the account and sometimes the geographic location of the customer).  Collection practices may involve specific, planned steps or a combination of procedures.  They may also vary according to trade practices or competitive pressures.  For continued, successful results, a well-managed organization will set up (and periodically review) a clear-cut credit and collection program.  All departments should be made aware of the procedures followed and their responsibilities towards helping to carry out management’s credit and collection policies.