Five strategies to reduce your overdues!

How to reduce your overdues? How to prevent and limit the risk of non-payment? Find our five best practices.

Sens et credit managementRecurring late payments, unpaids due to insolvency or cash flow tensions, unresolved disputes, etc. There are many causes that negatively impact businesses cash flow and profitability.

Faced with these risks, there is no fatalism but simply good practices to be applied on a daily basis.

Here are five key ones:
  • 1. Anticipate customer risk

  • Before granting a payment term, that is to say a credit, to your client, it is essential to ensure that he will able to pay you. For this, there is a method known as credit risk management, which makes it possible to assess the financial solidity of a company and to set up, if necessary, security tools (credit insurance, bank guarantee, etc.) or risk mitigation tools (advance payments, contractual clauses, delegation of payment, etc.).
    This follow-up is done before entering into a commercial relationship and then throughout it.

  • 2. Take care of your accounts receivable

  • How can you demand payment of overdue invoices if you are yourself unable to provide an up-to-date statement of account? Customer accounting accounts can quickly become an incomprehensible catch-all if reconciliations are not made on a daily basis between invoices, payments, miscellaneous deductions or credits, bank charges, etc. In this case it is impossible to match your accounts receivable with the accounts payable of your buyers.
    It is therefore essential to keep your accounts well and to regularly ensure that they correspond to those of your customers. Thus the communication will be fluid and efficient to recover your debts.

  • 3. Apply recovery scenarios

  • To get paid, time management and the progressiveness of recovery actions are essential. One or more collection scenario containing a combination of (interactive) e-mail, phone calls, SMS, electronic letter with acknowledgement of receipt actions which are triggered according to customer account situation allow to achieve this goal.



  • 4. Handle disputes as they arise

  • Sometimes the customer has a good reason for not paying. He disputes the invoice because there was a problem: partial delivery, poor quality, billing error, etc. There are many causes to justify a commercial dispute. In this case, there is no point in chasing the customer until a satisfactory response has been provided. By identifying disputes early and resolving them quickly, not only will you get paid, but you will also help to maintain or even increase customer satisfaction.

  • 5. Improve internal processes

  • Late payments are all consequences of dysfunctions in your sales process. They represent an opportunity to identify them, quantify them (is it always the same problem that generates an overdue invoice?) and deal with them. Whether it's the lack of risk management before the sale, recurring logistics problems, or a lax collection process, implement corrective measures to fix the issue at its source and no longer suffer the consequences.
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