Who do i deal with, debtors and creditors?
I got myself in some trouble, i had a credit card and was paying the minimum times 4, then i got paid of and they reneged on the insurance cover. I cleared it through my bank and they settled it with the credit card company, dropped the minimum down to the legal standard they had to accept what i gave them. 750 owing, i offered them about 2 grands worth of astronomical and photographic equipment for ballif collection including full proof of ownership. Funny enough they used a well known law against me, there are no private ballifs in the north of Ireland, but its funny how they threaten people with them. They refused siezure of goods as payment. So one week i'm getting a demand from the bank/credit card then the next i'm getting a letter from creditors demanding full settlement week later its the bank credit card company. Who do i deal with? The creditors must have bought my debt. But i'm not paying the minimum to the bank/credit card company and then paying the creditors what they demand.
- 1 decade agoFavorite Answer
It is becoming the norm for almost all businesses to offer credit to their customers (depending on your type of business) and so it is not surprising that this is one of the largest influences on poor cash flow. This is where a good management system needs to be integrated using budgeting and cash flow forecasts. More importantly, a good credit policy and effective credit control needs to be adopted.
When customers fail to pay you back at the agreed time, it can have a major impact on your cash flow particularly if the money owed is a significant amount. This can leave you short of money at that point in time (and possibly for longer if the debt becomes an aged debt) and leaves you with the trouble of raising more finance to compensate for the delay in payment.
Failing to keep control of your debtors is one of the main causes of having bad debts and so it is important that you follow up immediately on any late payments. At the same time, it is important that you keep good relations with your customers, particularly the important ones.