8 Top Tips for Better Credit Control

8 Top Tips for Better Credit Control

 

1. Know your customer – Is your customer a Dr Jekyll or a Mr Hyde ?

  • Obtain a Credit Risk Assessment before you start trading together
  • Keep monitoring the customer to be alerted to “danger” signs

2. Decide how much credit to give to your customers

  • Formalize procedure for setting customer credit limits
  • Money up-front, part payment or, rarely, reduced credit for first purchase
  • Weekly, monthly or even daily limits to restrict initial credit
  • Periodically review the credit limit
  • Only raise credit limit by following same formal procedure as when limit first established

3. Credit Control Team O – Sales Team 1

  • Sales are really only sales when the money from them is in YOUR bank
  • Make sure that your Sales Team know about it when you are experiencing difficulties getting paid by THEIR customers
  • DO NOT begin new work when there is doubt about getting paid for old work

4. Don’t be a Pussycat OR a Tiger !

  • Set up a formalised debt collection policy
  • Create a sequence of letters and / or telephone calls (preferably automated)
  • Keep copies of correspondence and record notes about telephone conversations
  • Follow up promptly on any broken promises of payment
  • DO NOT have too many steps before taking firm action
  • Remain calm but assertive when chasing on the telephone; no need to shout but also no need to whisper
  • NEVER threaten to take firmer action and then NOT do it.

5. Early warning signs that you won’t get paid (on time or not at all)

  • Rise in number and frequency of excuses, such as “signature not available” , “missed payment run” etc…
  • Customers blaming others eg. “customers not paid yet”, “postal problems” etc…
  • Days taken to pay you keep increasing

6. NOT always your customer’s fault

  • Send your invoices to your customers straight after the goods have been sent or you have provided your services
  • If your customer insists that you MUST have a specific reference number on any invoice that is sent to them, make sure that you DO include it
  • NO use chasing a customer for payment of your invoices AFTER they have completed their monthly payment run. Find out when they perform this and contact them BEFORE they run it to make sure that YOU are on it
  • Confirm in writing / email with your customer  who you should contact for payment when due BEFORE starting work with them
  • Contact your customer BEFORE your invoice is due to be paid to confirm that they have received your invoice and that they have accepted it. If any problems at this point, they can be resolved to prevent delays in payment when you are expecting it

7. If your customer delays payment, what would YOU do about it ?

  • Keep chasing them for payment in a consistent way that gradually becomes firmer
  • Suspend the provision of further services to the customer
  • Threaten legal action – ONLY if you would be prepared to follow through with it !

8. Make sure your systems are “Up to the Job”

  • Make it easy to provide copies of invoices “on the fly” when you are on the telephone to your debtors
  • If you produce invoices using many different software packages it is not so easy to do the above
  • Send copies of the invoices when sending chasing letters or statement
  • If you need to provide “backup” paperwork with your invoices, make sure you can with the minimum of effort

How can WE help YOU get paid ?

The field of Credit Control is pretty vast and the number of excuses given by your debtors can be even greater. We don’t expect to cover every aspect of Credit Control within it in this blog post, rather to give the reader a “bit of a taster”.

Harley Grove Ltd are able to provide the following services to help you improve upon your Credit Control function within YOUR business.

CH_Logo_Compact_WebCredit Hound – Chase your debtors with Self-Chasing Credit Control software and make sure that you get your money back. Currently compatible with Sage 50 , Sage 200, Microsoft Navision (NAV), Microsoft Great Plains and  SAP Business One (ask about others in the pipeline).

 

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Outsource your Credit Management  – Harley Grove Ltd offer a complete outsourced credit management service that ensures that outstanding invoices are collected quickly and efficiently in line with a client’s agreed terms of business.

WOULD YOU LIKE MORE INFORMATION ? CALL 01825 766406
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