Manage Your Exceptions | Credit Management Advice | #8

Описание: Everybody adheres to the rules at all times in the Perfect World. In the real life this is very far from being the case. Imagine you have a customer who pays you on 30 days credit terms. On day you agreed to make a shipment on 40 days and they've paid it on time. But when payment for another shipment fell due, they delayed it as they assumed 40 days as the new term.

Success in business requires flexibility. And the harder the times the more exceptions we have to make. An exception itself is not an issue. The real challenge is to prevent it from becoming a rule without our consent. Avoid the situation when we have to repeat something just because we have done it once in the past. Especially if we didn't like it.

We can get around the exception trap using four simple rules:

1. Determine Why
It is necessary to answer as accurately as possible the question of why we are making this or that exception. What do we gain by making it and what happens if you do not.

2. Call a spade a spade
Providing an exception to a trading partner, for example, a larger limit or payment delay, it is necessary to explain that this exception is valid for a certain period. When it will end, you will return to normal practice or discuss it again. But this will never last forever.

3. Set boundaries
Each exception must be limited by the amount, duration and specific purpose. For example: "an additional limit of 100 thousand, with an extended term of 45 days, for shipment on August 25 in the amount of 1000 units"

4. Control
The fulfilment of exceptional conditions, like any other, must be controlled. Especially if there are several. And failure to comply with them should be treated in exactly the same as incompliance with the rules.

5. Stop on time
If the number of exceptional transactions exceeds usual ones and continues to grow - this is just the right time to review the rules.

This simple set helps to manage exceptions without damaging relations. Just do not forget to use it. As you might notice, the above rules apply not only to receivables and payables.We may use them in other business functions.

Bon Credit! 👍

Do you wish to learn Credit Management in-depth?

Trade Credit: Decisions and Optimal Terms
https://www.udemy.com/course/trade-cr...

Trade Credit: Proactive Credit Control
https://www.udemy.com/course/trade-cr...

Trade Credit: Cash Collection and Recovery
https://www.udemy.com/course/trade-cr...

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