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Sellers can avoid bad debt losses through better handling of their receivables. Here are some suggestions.

Create and maintain accurate customer records, including full name of customer's bank. Know name of person who approves payment, signs check and the superior of each at customer location. Call a new customer and tell your credit terms. Ask: Can you live with that? If No, ask customer what terms he wants. If acceptable, accept! It is better to be surely paid in 45 days than to wonder, at forty days, why your thirty-day terms were ignored. Confirm by letter your agreed payment terms. Consider repeating this entire process yearly, always seeking to impress customer of your carefulness in credit granting.

Know that slow payers trigger a different approach. On receipt of order, call and indicate your exact credit terms, ask if that's agreeable. In effect, get an advance commitment of future payment, specific to that situation. Confirm your accomplishment in writing. Then, when order is shipped or five days later, make another call, again reminding slow pay customer of his prior agreement to your payment expectation. And, the most important call of all is made five days before payment is due. "I hope you are thinking about the money due us next Tuesday. Will there be any problem?" Pause, listen. Be sure that what is agreed upon during this call is clearly understood by you and your customer. Be firm here because you already had an agreement.

Do you have 'No Pays'? You should! If all customers pay within or very near your terms, you're losing business and profits. However, it will be your critical handling of these 'No Payers' that will enable you to reduce receivables loss to a desired level. The key is early identification of potential 'no payers', and then to make four or five programmed, orderly contacts. If these contacts fail, it should be your unflappable decision to utilize an authoritative Third Party such as a collection agency or an attorney. By placing claims early, complete with correct data, the Third Party will do their job more quickly and at less cost. Your advantage? You get your money faster and are free to work on current problems, keeping them from getting out of hand.

Receivables handling is an art, not just a matter of being tough. Success depends on your ability to convey to your customer the importance of accepting the responsibility to honor his commitment - in short, to keeping his promise to pay you. Early and frequent communication builds rapport with the customer and demonstrates your seriousness about being promptly paid. Remember, everyone pays some bills on time. With consistent follow-up, your bill can be one of those paid.