Letter to reduce customer credit

Discussion in 'Cashflow forum' started by DavidWH, Oct 26, 2012.

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  1. DavidWH

    DavidWH UKBF Enthusiast Free Member

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    I have a credit customer who I do various bits of work for.

    I've made a few deliveries there and for a company of that size, is surprisingly quiet. ie: no machines running, no staff about, with several members of staff leaving.

    I've heard from several reliable sources that the customer is struggling, and I have taken a look at their payment history which gives me an average of 74days until I get paid, when they are on 30days terms.

    I am now looking at halving their credit limit with me, in the hope that it a) prompts quicker payment b) should they go under I don't loose as much.

    Having never done this, I am struggling to think how to word a letter to this effect. :|
     
    Posted: Oct 26, 2012 By: DavidWH Member since: Feb 15, 2011
    #1
  2. roydmoorian

    roydmoorian UKBF Ace Full Member - Verified Business

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    Your terms already say 30 days and they are taking 74 so the best thing you can do is put them on stop until they are within the existing terms.

    Also ensure that your T's & C's do not allow title to pass until the goods are paid for.
     
    Last edited: Oct 26, 2012
    Posted: Oct 26, 2012 By: roydmoorian Member since: Nov 6, 2009
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  3. ICE-PACC

    ICE-PACC UKBF Newcomer Free Member

    23 2
    Hi it m ight be worthwile getting a credit report done, and basing your revised credit limit on your findings there.
     
    Posted: Oct 26, 2012 By: ICE-PACC Member since: Oct 8, 2012
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  4. mcjohn

    mcjohn Banned

    44 2
    Yes you should put them stop until they are within the existing terms because your terms already at 30 days and they are taking 74.After that you can check your credit score.
     
    Posted: Nov 22, 2012 By: mcjohn Member since: May 24, 2012
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  5. Geoff T

    Geoff T UKBF Legend Full Member - Verified Business

    5,599 1,262
    both examples are EXCELLENT ways of doing two things:

    1. Making sure your debt exposure doesn't get worse...
    2. Making sure you lose a customer!

    Why not not TALK to them first... explain your concerns, explain why you'll be reducing their limit on an ongoing basis (and might have to stop supplying), and at all times will be sticking to this...

    Commercially viable "working solutions" are ALWAYS better than reactive, OOT ideas in credit control/debt management... those IN the profession are better qualified to answer these questions than the [many] who chase money at the end of their [regular] day...

    (I now expectantly wait for this to be proved)...
     
    Posted: Nov 22, 2012 By: Geoff T Member since: Apr 30, 2009
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