5 Reasons to stay on top of Credit Control


There's an often used saying that goes:

“A sale is not a sale until it's paid for”

Yet that's something that lots of small businesses often forget – the sale isn't really a sale until the money is in the bank.

It's very easy to look at your list of sales and think you've done well, but if your credit control isn't up to scratch, then it's all just figures on a piece of paper.

Here are X reasons why you should keep on top of your credit control.

  1. Suppliers
    If you're not collecting money from your buyers and customers on time, then the chances are you're paying your suppliers late too. This leads to bad relationships, loss of discounts and preferential treatment, and can in turn lead to suppliers refusing to deal with you. As you're finding out yourself, no-one likes to provide goods or services to a customer who doesn't pay up on time!

  2. Staff
    Obviously your staff won't be happy if it's clearly difficult to pay them every month, and even less so if they're paid late, but it's not just their salary that can be affected by lax credit control. If you're not collecting money on time, and not paying suppliers on time, then the chances are it's your staff bearing the brunt of the money chasing phone calls, and that can be really bad for morale. Reducing production and conviviality among colleagues. Unhappy staff don't do a great job!

  3. Reputation
    This works both ways – if you become known as someone with less than perfect credit control then your suppliers will take advantage of this and pay later and later – your reputation as a bit of a pushover could spread and before you know it you're spending more time chasing money than you are earning it. And of course, no-one wants to have the reputation of being a late payer, so you may find it hard to get new suppliers and preferential prices if it's widely known you can't pay on time.

  4. Bank
    More and more these days the banks want to see a steady flow of money coming into a business account. If all of your chasing is done when your business bank account is into the overdraft, it's quite clear to your business bank manager that your credit control policies leave a lot to be desired. Also, if you want to apply for a loan or an overdraft / extension in the future, the bank will look at how your account has been run – if your credit control makes your business look unprofitable you're unlikely to get that loan.

  5. Continuity
    Whether you're a one man band or a small team of people, having to stop and chase money or answer money chasing calls eats into your production time. If you have to stop work for a client because they haven't paid, it gets harder to pick it up again. If you have to tell a supplier to stop provision of a service or goods because you haven't paid, then when you do pay, it could be a while before they can start again. Continuity in business is important to keep the flow of a job going, don't let your bad credit control spoil it!

They say that cash is king and as we can see, good cash flow is essential to running a successful business – no cash, no business.

Giving your customers credit may be good for sales but do you have the right procedures to collect the cash?

Credit Hound® is designed to automate and streamline the processes involved in good credit management. Greater automation of your chasing procedures improves productivity and brings savings to key areas in your business.


WHAT NEXT ?

                        CallBack                   Email 2     

 

            

Share
Web Statistics