Here's how not to get caught by companies going bust

ICSM Credit has made the news by explaining to readers of Print Week how to stay out of trouble. 

Paul Carrott, ICSM Credit’s debt collection manager said: "The print industry has been notorious in the past for so-called gentlemen’s agreements. A simple handshake and the phrase, “my word is my bond,” have been enough to seal many a contract between a printer and his or her client. All well and good in good times maybe between trusted friends but not anymore."

“There are some basic housekeeping procedures every printing firm, self-employed person or supplier in general can and should take.

“Firstly, take invoicing and payment seriously. Don’t invoice late, always chase up late payment and ensure the customer has agreed to your terms and conditions before you start work.

“If your terms are payment on 30 days then every day after that is late and should be treated as such.”

“All too often suppliers are being too lenient when their clients go beyond terms, continuing to accept further orders adding to an already overdue account or providing credit terms that way exceed the recommended limits set by credit reporting companies.”

Paul gives ten useful tips for print firms in their internal accounting procedures.

1. All customers to agree to your date terms and conditions and ensure they are signed. Whenever possible, keep a record of your client’s bank details. It is not uncommon to request them in a credit application form.
2. Have a strict procedure on invoicing, with invoices sent out on time as soon as a job is completed and ensure that if a purchase order number is required, you have it!
3. Send a reminder by email before the payment due date after 14 days if terms are 30 days, and 7 days if terms are 14 days.
4. If payment fails to turn up on the due date, phone the client and make sure you get a verbal answer from them or their accounts department stating when they will pay. Email them afterwards to remind them with what they said.
5. Send a monthly statement by email listing everything owed.
6. Insist on payment by BACs and not by cheque.
7. Keep the channels open between the accounts department and that of your customer by polite and friendly telephone calls and emails.
8. Charge interest as according to your terms and conditions on overdue amounts.
9. Stick to your procedures and be firm at all times with the client over payment terms. It is your money after all.
10. Keep all written/email correspondence and paperwork in case of legal action and never threaten legal action if you do not intend to pursue it.

“One conflict that can arise is that between the accounts and sales departments,” said Paul. “A large order may have just been received by the sales team from a client while the accounts department is about to put the customer on stop. A system needs to be in place on whether the order can be processed or not, usually with the financial director or equivalent making the final decision.”

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.