Hints & tips on how to avoid debt
Euler Hermes Collections UK's debt collection hints and tips outline the key warning signs, credit control procedures and credit control guidelines for your company to follow. We have also included a section full of useful information for those trading abroad (see further below).
Read the common key warning signs
No one knows your customers better than you, so any change in their normal behaviour or relationship should instantly ring alarm bells. However, we have listed the key warning signs to look out for when you suspect a customer may have difficulty in paying their debts, before debt collection becomes a necessity.
Follow the credit control procedures
If you detect that one of your customers may be having problems paying their debts, it is important to have a structured plan and maintain a systematic approach whilst attempting to resolve the issue, before placing their debt for collection. Use our list of procedures to help ensure you stay in control of the situation.
Implement credit control guidelines
Follow our credit control guidelines in the document below. If your customer still hasn't paid after that, then contact Euler Hermes Collections UK to employ our efficient debt collection services.
Five golden rules for those trading abroad
1. Know who you’re dealing with
Don’t rely on hope or instinct alone. Get status reports on any customer you’re planning to deal with before you supply your goods or services. Even better, pay them a visit.
2. Don’t give credit too easily
Be cautious about giving credit to a new customer, and if possible secure your payment by means of cash up front, a letter of credit or credit insurance.
3. Be clear about the exchange rate
In other words, will you be using today’s exchange rate, or the rate that applies on the day your customer’s due to pay the bill? Make sure that the precise arrangement is agreed by both parties and stated in the contract.
4. State, in your Terms & Conditions, the country in which you’ll take legal action.
Of course, we hope legal action will never be necessary. But this is another area where putting your protection in place, in advance, really can pay. The trading laws and legal processes in different countries can vary dramatically, so it’s never worth leaving the choice of where litigation will take place open to question.
5. Communicate, communicate, communicate!
Don’t place all your trust in letters and emails. Use the phone. Or, if possible, visit their premises and meet your buyer face to face. And find reasons to stay in contact on a regular basis. You need your customer to know you’re interested, involved and on the ball. In our experience, there’s often a strong link between late payment and poor communication. The more you can do to build a strong relationship with your international customers, the less likely they are to mess you around.
Euler Hermes Group
