10 tips to improve your credit control process
Credit Control is probably not the task business owners have in mind when starting up a business, but it is necessary to keeping your business healthy and maintaining good cash flow.
Have a clearly written payment policy to prevent problems. Have customers sign the agreement, which states when payment is due and what consequences there will be for late payment.
Include specific due dates on your invoices. Adding the phrase “payable in 30 days” is less firm than “due on 30th”. So remember to include a specific date.
Set up company procedures for collections. Define whose job it is to follow up with custom
So, here are my top 10 tips to improve your credit control process:ers and exactly when statements and reminder letters should be sent and phone calls made. If you can give someone else the job of chasing invoices it can ensure your relationship with the client is not affected.
Email invoices instead of mailing them to shorten the collection cycle. Discuss with your client during the onboarding process of how they would like to receive their invoice, but I would always recommend pushing to do it online.
When a payment date has passed, follow up by phone and email and agree timescales.
Emails and paperwork can easily be forgotten or lost. Phone calls and face-to-face meetings are more effective and ensure you get a response from your client and hold them accountable to their promises.
Remain calm and professional. This is a business transaction -You delivered a product or service, and the client owes you money. Do not let your emotions get the better of you, ensure you stick to your process no matter what your relationship is with the client.
Be precise. Do not let a client end the conversation by saying, “I’ll send something soon.” Get a commitment to a specific amount by a set date. Then summarise the conversation to the client so there is no misunderstanding and send a follow-up email.
Document every point of contact with clients.
This can include emails, letters, phone calls, etc. It can make it easier to track how many times they have been contacted, what they have promised and when the process began to monitor when more serious action needs to be taken.
Follow up each time a customer does not honour a payment commitment.
If for some reason you haven’t been paid and there is an acceptable reason, explain that you must be notified in advance when a payment will be late and then ask when you can expect to receive it.
Hire an external member of staff to do the chasing
Outsource the job can get this done without letting it affect the day-to-day running on your business. Its that simple!
If you are struggling to chase your invoices or maybe you have had relationships ruined with your customers over late payment, please give me a call at 07811393520 and I can help you to implement a process that ensures your business gets paid without any hassle.