Credit Control Essentials


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

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

Latest Result – Credit Control 0 Sales Dept 1

Win for customer  BUT could be a loss for YOUR business

  • 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

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.

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

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

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 !

How can Harley Grove help YOU to get paid?

The field of Credit Control is pretty vast and we don't expect to cover every area within it in this blog post, rather to give the reader a "bit of a taster".

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

  • Credit Guardian – Check your prospects and customers out for Credit Risk; FREE software and annual subscription based on the number of companies and linked with Experian
  • Credit Hound – Chase your debtors with Self-Chasing Credit Control software and make sure that you get your money back
  • Outsource your Credit Management  – Harley Grove 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.

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