Blogs, Finance, Finance
3 tips for strong credit management
24 March, 2022
3min. reading time
In what business you may operate, your financial administration is of great importance. To keep your company up and running you must earn money at last. Also in the logistics industry. You execute logistic services for your customers, and they pay you for that. Simple! However, invoicing is not always as easy as it may sound. And you cannot always rely on a smooth payment from your customers, which results in tension in the relationship. So, how do you handle your credit management? In this blog, we give you tips to smoothen your credit management from our own experiences.
1. A deal is a deal
A good relationship with your customers starts with mutual agreements on payments. You provide logistic services to your customers. And have come to an agreement with your customers about that. In these type of agreements there is always a section reserved for the terms of payments. Make sure all parties do everything in their power to deliver what is agreed upon. Good entrepreneurship, that is called. Send an invoice on time. And express expectations.
2. Map out actions when invoices are overdue
Of course, it can happen that you have not received the payment within the discussed period. First, assume that your customer has forgotten the invoice. Send him a friendly reminder with an overview of the open invoices. That is what we do at Boltrics too. Often, it is no big deal yet.
Do you receive an invoice that does not seem to be correct yourself? Do not leave it lying around but contact your supplier right away.
Still not paid?
When the next expiration date has passed, this often leads to a second reminder. However, also give your customer a call. Ask your customer to pay the invoice as quickly as possible. Otherwise, the services to your customers will be affected by it. And both parties would want to prevent that. This message does not have to be in the same tone as the first one either. You can sound a little more convincing.
Is the invoice still not paid after that? Then you can take action. For example, stop any warehouse activities for them. Or use your trucks for other orders. Of course, you still have the intention of solving the problem together.
The final step
As a final resort, legal steps can be taken. The overdue invoices will then be seen as a break of contract and a lawyer will get the case. In other words, serious business. And you would want to prevent this. Both as a customer and as a supplier. Therefore, try to solve the problem before it comes to this. Make it negotiable.
3. Do not cure. Prevent!
You cannot have good credit management all by yourself. You need your customers for that. Therefore, see what your customers can do to prevent situations as described above. Probably, as a customer of Boltrics, you align the terms of payments in your financial software with the terms of payments agreed upon. Demand the same from your customers. In fact, no one wants to discuss overdue invoices every week.
Do your customers get an invoice every month, structurally? Discuss direct debit with them. In that way, you prevent an invoice is forgotten.
Together towards strong credit management.
The most important ingredient for good credit management is communication. Do you receive an invoice that causes problems for your liquidity? Contact your supplier. That also goes for your customers. Be open to this kind of conversations. Because the sooner it is communicated, the sooner a solution is found.