1. Establish a Credit Policy
Set the rules under which your business will grant credit and expect accounts to be paid.

2. Use a Credit Application Form
Obtain detailed information identifying the credit applicant, and the amount of credit sought. The credit application should include full names, past and present addresses, employment details, trade or account references and identify the applicants' principal trading bank. The credit application should also include clauses allowing the recovery of collection costs and clauses which meet Privacy Act requirements

3. Seek Personal Guarantees
Where the applicant is a firm or company, personal guarantees should be secured from the proprietors or authorised persons (preferably the directors) as appropriate.

4. Credit Check
Verify the information on the credit application and then conduct a TCS credit check.

5. Advise the Applicant in Writing
of your decision to grant or deny credit. Where granting credit, set a limit you are comfortable with and reconfirm your credit terms. Where credit is being denied, invite trade on a cash basis with an undertaking to review the application after a suitable period.

6. Statement of Account
should read either 'current' or 'overdue'. The inclusion of 30, 60 or 90 day balances encourages slow payment.

7. Monitor all Accounts Closely
Follow up by telephone immediately an account becomes overdue and agree a new date for payment with your customer. Remember a lack of activity on your part will invite a similar response from your customers. Pay special attention to new account customers as they have yet to earn your trust.

8. Thank Customers for Payment
An occasional telephone call or note thanking a customer for payment not only encourages timely payment but will assist to cement the business relationship.

9. Suspend Credit
where a customer has ignored requests for payment or not fulfilled their promise of payment by an agreed date , they should be advised that their credit facility with you has been suspended pending a more satisfactory arrangement on the account. The customer should be invited to continue trading on a cash basis and will be likely to accept if they are solvent and value the business relationship.

10. Act Quickly and Decisively
Once you fail to obtain a positive response from your debtor you should immediately commence recovery action. The likelihood of a prompt settlement diminishes as an account ages. Accounts lodged early get paid early!

Please remember, Tasmanian Collection Service is here at your service, happy to advise on any specific problems or issues you may encounter in the setting up or ongoing management of your credit policy