Credit-to-cash briefing:

Ten tips to get yourcustomers to pay on time
The secret to prompt payment lays in a systematic andconsistent approach to credit management.

Credit-to-cash briefing:

Ten tips to get your customers to pay on time1.

Minimise confusion with a business
contract4.

Keep your customer records up todate. This will help ensure invoices are submitted without errors,
and any agreements made about
payments terms are recorded. This
will help you minimize disputes andconduct collections activity in theright way.

Set your terms and conditions oftrade in your contract. Include aclear statement of interest charged
on overdue accounts and retentionof title terms for unpaid goods. Thiscan be an effective way of avoiding
payment disputes.
2.

Bill promptly to get paid quickly

5.

Invoice as soon as possible. Any
delays in submitting an invoice will
inevitably result in a corresponding
delay in payment and could negatively impact cash flow.
3.

Understand payment behaviour byknowing your customers
Due your due diligence on allprospective customers, including
running credit checks and continue
to monitor existing customers. Are
they facing supply-chain or sector
challenges that might impact their
cash flow? For example, how much
has their business/industry been
impacted by a situation beyond theircontrol such as COVID-19? Categorise
your customer-base according to
payment behaviour. Consider incentivising good and fair payers withdiscounts for early payments.

Ensure the accuracy of your data

6.

Invoice overdue? Act now
There are many reasons an invoice
may become overdue. For example,
your customer may be withholding
payment until a dispute over the
goods or service you provided has
been resolved. Or perhaps they arehaving temporary issues with theirown cash flow. As soon as a payment
becomes overdue, pick up the phoneor send an email. The majority ofoutstanding payments can be resolved quickly and amicably throughgood communication. Be ready tonegotiate a payment plan and offer
payment methods that are simple
to achieve. This may be particularly
necessary during times of crisis suchas COVID-19, when accounts payablestaff may be working remotely.
Document your calls
If you speak to your customer, keep
notes of every conversation you haveand follow up with a summary email.
This is a great way to avoid confusion
and will help you keep on top of anydevelopments.

7.

Write a letter to request payment
Dunning letters are a formal andrecognised method of reminding customers that an account isoverdue. The first letter is a simple
notification of an overdue invoice.
Subsequent letters follow a progression from polite reminder to moreinsistent demands for payment.

8.

The cheque is in the post
If your customer prefers to pay bycheque, ask them to email you withthe posting date and a note of thecheque number. This can help alert
you both to any cheques that havegone missing in the mail. You willneed to allow at least three days forthe mail to arrive.

9.

Electronic payments are preferable
Electronic payments are a quicker and safer payment option thancheques as they can be tracked moreeasily. If your customer is still usingcheques, ask whether they would
complete a bank transfer instead.

10.

Consider engaging a collections
agencyWeigh up the cost involved in time,effort and monetary value in chasing
an unpaid invoice and consider
whether it would be more efficientfor you to engage a professional
debt collection agency. A goodinternational firm, such as AtradiusCollections, should aim to preservea good relationship for you and yourcustomer and be able to support you
with both national and international
debts. Such outsourcing can also be
effective if your own accounts receivable team is short-staffed.

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Disclaimer
This publication is provided for information purposes only and is not intended as a recommen­dation or
advice as to particular transactions, investments or strategies in any way to any reader. Readers must
make their own independent decisions, commercial or otherwise, regarding the information provided.
While we have made every attempt to ensure that the information contained in this publication has
been obtained from reliable sources, Atradius is not responsible for any errors or omissions, or for theresults obtained from the use of this information. All information in this publication is provided ’as is’,with no guarantee of completeness, accuracy, timeliness or of the results obtained from its use, andwithout warranty of any kind, express or implied. In no event will Atradius, its related partnerships
or corporations, or the partners, agents or employees thereof, be liable to you or anyone else for any
decision made or action taken in reliance on the information in this publication, or for any consequential,special or similar damages, even if advised of the possibility of such damages.

Connect with Atradius

Atradius@atradius

atradiusgroup

Atradius
David Ricardostraat 1,1066 JS Amsterdam
The Netherlands
Tel. +31 (0)20 553 9111Contact usatradius.com

info@atradius.com
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