HEALTH CHECK

Trading on credit basis is the norm for most businesses today. However, following up on unpaid invoices can be a time-consuming and frustrating task. It is therefore prudent to have in place systems, processes and procedures to manage your business accounts receivable to ensure your business remains liquid and able to meet its working capital needs.  

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1. Do you check the creditworthiness of new customers before trading on credit basis?*
2. Do you monitor existing customers for adverse changes that may affect their ability to pay?*
3. Do you make a provision for bad debts in your accounts?*
4. Do you adhere to strict credit control processes and procedures?*
5. Are you sending out invoices promptly?*
6. Are your credit terms clearly stated on all pricelists, quotations, contracts, and invoices?*
7. Do you maintain a Receivables Aging Analysis or Report?*
8. Is your internal credit control system effective and efficient?*
9. Do you have in place a debt collection process?*
10. Do you have an action plan to deal with defaulting debtors?*

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Trading on credit basis is the norm for most businesses today. However, following up on unpaid invoices can be a time-consuming and frustrating task. It is therefore prudent to have in place systems, processes and procedures to manage your business accounts receivable to ensure your business remains liquid and able to meet its working capital needs.  

 

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