Credit Policy for businesses and how to extend credit and manage credit risk

When I worked as a Credit Manager I loved the challenge of coming into a new position and cleaning up the accounts receivables or collecting more money than anyone else. I like to challenge myself and would then use my results to help me get a raise when it was time for my yearly review.  I can proudly say that in every position as a credit manager that I have held, I have been the biggest collector (at that time) for those companies. Therefore, they had more money, they were very happy with me and I always got the raise I asked for.

I want to challenge you to see how much more money you can collect in one month from your past due customers.  If you use the steps I give you here, for one month, religiously, you will have more money.  If you don’t, please email me and let me know what steps you took and what happened.  I have been teaching these steps as a fast, quick fix to get more money into people’s businesses’ for years and have not had anyone tell me it didn’t work (yet!).

1. Pull out the past due accounts with the highest dollar amounts.  Send them a collection letter that is not folded, in a Priority Mail flat rate envelope.  Set up an account at the United States Post Office website and print your postage on your own computer. (you don’t need any special ink or paper).  When you do this, you will get delivery confirmation for free.  Mail those envelopes and watch what happens.  Since these envelopes cost $4.05 each to mail (until postage goes up), send out 5 or 10 a week for a month, or as many as you can afford.  Remember, it is worth the price, if someone owes you $250, you will pay this $4.05 but you will get a response and a payment.
2. Now call as many people who are past due (even  the customers you sent the above letter to) each day for one hour for one month. If you get a machine, leave a message.  Don’t say you are calling about a past due bill, just tell them this is Bob from ABC Construction, please call me at 555-1234. 

Please let me know if you accept this challenge and how it worked for you!