The key to effective Debt Management is FOCUS, TIME and COMMUNICATION. Listed below are some steps and principles an owner-manager should adopt in order to best manage debt and maintain a successful credit control policy.

1. Consider credit limits (perhaps vary these for longstanding customers versus new customers).
2. Devote the time to invoicing regularly and following up queries and overdue accounts (i.e. a set time each week).
3. Review the debtors ledger weekly (understand who owes you money and how much they owe - this will drive how much you are willing to supply in future for what price).
4. Consider whether pro-actively following up customers before the due date will have a greater impact on receiving payments on time.
5. Monitor the performance of each debtor, rather than just the average days it takes debtors to pay.
6. Understand how much you need to collect on a monthly basis to pay the bills - this should be your minimum collection target (collecting 100% within 30 days is the desired outcome).
7. Remember the WOW factor! That is the closer you can provide the invoice to the supply of the goods/service the more likely the customer's WOW factor is at its highest and therefore it is more likely priority will be placed on paying the invoice. The more time that elapses, the more the WOW factor is likely to have dissipated.