8 quick tips for credit control success
Posted on by Cindy Yip
Estimated read time: 5 mins
Tired of sacrificing your time, effort and capital into an
everlasting whirlpool of credit control that doesn’t seem
to ever be getting easier? You’re not the only one.
Credit control can often be regarded as a time-consuming and attention-grabbing drain on resources, taking you away from growing and nurturing your business. If not managed correctly, it could hamper your success.
From investment to morale, it cannot be denied that unpredictable cash flow will affect the future of your company, in some cases rendering you unable to invest and plan for the future.
The great news is, avoiding these headaches may be a lot simpler than you think. All it will require is just 5 minutes of your time. If these 8 tips are implemented early on, you can be sure to minimise any future credit control issues, allowing you to focus on the important stuff.
The only way is up – 8 quick tips for credit control success:
1.Check your sales ledger.
Don’t be fooled, this isn’t the large job you think it will be! Spending 5 minutes each morning reviewing your sales ledger can be a great way of flagging up which customers are approaching or missing payment deadlines. This information can then be used to plan your time effectively.
2.Call your customers.
The importance of maintaining a personal relationship with customers throughout the credit period can help to keep your invoice in mind. A 5-minute telephone conversation can build a positive rapport and increase your chances of getting paid on time, by indirectly reminding them of any looming deadlines.
3.Rework your invoice template.
Are your invoices as clear as they could be? Is important information, such as credit terms, accepted payment methods and expected payment dates, prominently displayed? Make sure your template is not cluttered, which could potentially confuse matters.
4.Keep an eye on existing customers.
You may be credit checking new customers, but are you remembering to check up on your existing clients? Not doing so could pose a risk, as circumstances quickly change and your original credit check may no longer be accurate. Monitoring customer credit scores online can help to identify which customers to keep an eye on.
5.Research credit circles.
A great way to check the financial credibility of your customers is to become a member of a credit circle. Here you can share and analyse important curator trends with other companies. Different trade and industry circles harbour relevant and advisory information about prospective clients.
6.Concentrate on the larger debts.
If you have numerous older debts that are consuming a lot of your credit control time, it could prove beneficial to focus on the largest invoices first. This will help you to improve your cash flow whilst you wait for payment from your other customers.
7.Get a quote from a debt collection agency.
Why not let a specialist take care of your overdue debts by outsourcing the work to an experienced debt collection agency? Getting a quick quote online will only take a few minutes and quickly reveal how much it would cost if the invoice is successfully recovered. And, with the added weight a third party brings, the chances are you will get paid sooner.
Inform the customer of the impending consequences if they continue to ignore your communications. A Letter Before Action explains to the customer your intention to commence legal proceedings against them if they do not pay within the next seven days. However, be sure that this is your only option left as it could potentially cause damage to your relationship.
Hilton-Baird Collection Services is an experienced commercial debt collection agency, with a proven track record in delivering excellent results for SMEs. If you’re looking for help with an individual invoice or looking to outsource your credit control function to the experts, we can deliver a solution that’s right for your business. Visit www.hiltonbairdcollections.co.uk to find out how we could help your business.