Credit Matters

Article of Interest

Deductions: "Cashflow Killers"

Invoice deductions or credit claims will always cause a problem for any business. There are two reasons why invoice deductions and credit claims cause problems. First, they cost time and money to fix and secondly, they reduce your company's cashflow.

This article reviews the issues which are involved. Equally important, suggestions are offered on how to tackle the problems associated with invoice deductions and credit claims.

Credit Matters Comments

Deductions: "Cashflow Killers" by Darrell Dockery, CCE

In this article, Darrell Dockery discusses the problems associated with invoice deductions. To resolve the problems, first you must identify if the deductions are caused from within your company or whether the problems are the result of the actions of your customer.

Once the problem is identified, you need to communicate the problem to the respective stakeholders. These shareholders include your salespeople, credit or accounts receivable department, customer service, management etc. and your customers.

It is essential to include customers in your discussions on the causes and resolution of invoice deduction issues. Your good customers will quickly help you identify whether the problem exists with your company. Meanwhile, the less reputable customer will tell you in their own way, they are the cause of the problem.

Darrell also goes on to provide a number of suggestions on how to resolve the problems identified.

This article is worth a read, despite its age, because the issues raised some time ago, are still relevant today.

Full Article: Business Credit, March 1995

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