Debt Collection Policy
Check List

• Is a written application required with every credit request?
• Do you have a standard form for credit applications?
• Is it completed personally by the applicant?
• Is it reviewed for completeness?
• Is all information verified for accuracy and timeliness?

• Are your T&C more than 3 years old?
• Have they been written purposely for your company?
• Were they written by a specialist Credit Lawyer?
• Do you offer a cash discount?
• Do you use a late payment penalty?
• Is the time limit for payment clearly stated?
• Make sure that your customer's order does not suggest different payment terms

For more on Terms and Conditions

• Are applicants checked out with a credit bureau such as Shark Check?
• Do you know the legal name and structure of the customer?
• Does your evaluation consider income?
• Does your evaluation consider fixed obligations?
• Does your evaluation consider job stability?
• Does your evaluation consider residential stability?
• Does your evaluation consider credit history?
• Does your evaluation consider bank balances?
• Does your evaluation consider other assets?

• Are invoices prepared and delivered promptly?
• Is invoice preparation always accurate?
• Are payment terms clearly stated?
• Are customers' special instructions followed carefully?
• Are Statements sent within 5 days of month end?
• Are monthly statements submitted to all open accounts?
• Are statements prompt and accurate?

• Do you determine your average collection period on a regular basis?
• Do you compare your collection period with industry averages?
• Do you compare your current collection period with your previous experience?
• Do you compare your collection period with your payment terms?
• Do you have a monthly aging of all outstanding accounts?
• When a problem is identified, is corrective action prompt and firm?

• Do you have a systematic procedure for follow-up on slow accounts?
• Is there a standard sequence of follow-up letters?
• Is the tone of these letters progressively stronger?
• Do you use the telephone to contact delinquent accounts?
• Is your telephone technique effective?
• Do you offer special arrangements for collecting past-due accounts?
• Do you have a late-payment penalty?
• Do you put delinquent accounts on a C.O.D. basis?

• Do you have a working relationship with a collection agency?
• Are accounts turned over automatically after a specific time period?
• Do you refer the most serious delinquencies to a specialist Credit Lawyer?