Outsourcing or in-house debtor management?
Most companies perform debtor management themselves. They make it part of their administrative department and do it on top of it. Fine if your debtors always pay on time, but unfortunately this is usually not always the case. If you don't have the right people, time and resources to do it yourself, outsourcing debtor management is not such a bad option. Xolv has assisted several companies in 'outsourcing' their receivables management. By means of a link with the financial accounting system, you can permanently read in the outstanding accounts receivable and also consistently follow them up using a pre-arranged procedure. No more problems due to holidays, illnesses and lack of time. And the work is done by professionals who enjoy following up debtors. Even in several languages if required.
What should good debtor management comply with?
Good debtor management involves:
- checks the creditworthiness of new buyers (preferably already at prospect stage);
- Permanently monitor the creditworthiness of your buyers;
- confirm orders via e-mail or in writing (for new customers, always have orders signed for approval);
- checks that the general terms and conditions explicitly match;
- timely and accurate billing;
- contact the buyer immediately after due date and come to a payment arrangement (larger amounts even before due date);
- pick up and resolve disputes immediately (often stands in the way of payment);
- do not send too many written reminders. This is not very effective and notorious defaulters often know how many reminders they will receive before a company really takes action ;
- tightly follow up on agreements made;
- Set clear deadlines and meet them;
- send a notice of default before handing over the claim.
And remember: collection = collection. So actually execute!
Reduce the risk of non-payment
A company that cannot pay but wants to pay often communicates proactively itself. A company that does not want to pay often does not communicate. So the tighter you manage accounts receivable, the smaller the chance of non-payment. To eliminate this risk as well, credit insurance is the solution. You can seamlessly incorporate it into your debtor management. An additional advantage is that the credit insurer often puts extra pressure on a buyer to make sure they still pay. If they fail to do so, they pay out the claim.
