Overdue Accounts
Proactive and Reactive Measures on
How to
Avoid Overdue Accounts
TUTORIAL ON HOW TO AVOID OVERDUE ACCOUNTS –
PROACTIVE AND REACTIVE STEPS
How to avoid overdue accounts is an imperative question, largely because the
implications of not finding an appropriate answer to the same are ominous.
Overdue accounts are an undesired eventuality, which no sane individual or
business group would ever like to confront. In fact the vicious circle of
overdue accounts is such that, the exit doors are quite difficult to navigate.
In such circumstances, it is best to avoid the misery referred to as overdue
accounts rather than finding possible solutions at later stages.
Easier said than done, had the prevention been this easy, neither the
professionals would have dedicated hours penning articles on how to avoid
overdue accounts nor had UK witnessed mushroom growth of overdue accounts
collection companies. Therefore, post attributing due attention to the
complexities of overdue accounts, this article attempts to list few preventive
steps on how to avoid overdue accounts and at the same time, lists guidelines to
help with the overdue accounts collection exercise.
How to avoid overdue accounts??
Overdue accounts can be avoided by practicing utmost caution in daily operations
and at the same time constantly scrutinizing the credit terms. Even minor lapses
in any of the stated directions could easily push forth towards the overdue
accounts issues.
Policy amendments – Overdue accounts and thus credit issuance terms are
important enough to secure a prominent place in the overall company policy. The
fist preventive step with relevance to how to avoid overdue accounts therefore
begins by establishing a concrete credit policy. Let this policy be stringently
worded, communicated and followed. Let there be no exceptions and let all
business terms be governed by this standard credit policy. If at all there must
be any deviations from the defined, ensure to mark an upper and lower limit to
what is acceptable.
Know your customers – How to avoid overdue accounts is next answered by
gathering all relevant info about your business associates. Getting the customer
information would help follow up on payments and thus deal with overdue accounts
if any. The details which could be sought include customer name, address
(address proof – in case of volume transactions), contact information (phone
numbers and emails), banking info (optional) and security documents (again
applicable for large business dealings).
One-off checks – It might not be practical to check each and very customer on
past credit terms, however one-off checks might act as deterrent and would also
communicate your seriousness to avoid overdue accounts.
If despite the stated answers to how to avoid overdue accounts, you happen to
get entrapped in the issue of overdue accounts, here are few steps, which ought
to be immediately applied.
* Check the contact details and other info provided by customer
* Immediately mark follow up mails and letters, by different communication
modes. Do maintain a copy of the communication material.
* If required undertake a background credit check
* Check out the respective litigation costs and work out arrangements to deal
with overdue accounts.
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