Top 10 Tips For Successful Credit Control

This blog is suggesting what every business, small or large, should know about keeping their clients’ credit under control:

#1. Application forms
You need to know who you are dealing with, so get as much information about the business before you start doing work for them or selling them your products.

#2. Credit check
It is vital that you know the background of the company you are dealing with, this information can help you decide what credit limit to set or, more importantly, whether to refrain from dealing with potential delinquent debtors. You now have the ability with most credit reference agencies to 'monitor' companies and ensure that if anything changes to the company good or bad you are aware of the changes instantly.

#3. Set out your terms and conditions
This is your opportunity to clearly state your terms and expectations in your sales contract.

#4. Check references
There is no better way to get a sense of character than by word of mouth. Business associates will be genuinely pleased to sing the praises of good customers and conversely poor payers will be shown in their true colours.

#5. Set a credit limit
When you set a credit limit, stick to it! If a customer intends try and exceed the limit set it is time to re-assess the reasons why they require more credit - Has the company grown? are they no longer being supplied by another provider for late payment?.

#6. Payment chasing should be a tight operation
Having a system that runs like clockwork is essential, be sure to make a telephone call or send a letter on day that every invoice becomes due.

#7. Adding interest
You don’t have to put up with late payment. In 1998, business suppliers gained the legal right to charge costs and interests as per the Late Payment legislation.

#8. Employ an experienced credit controller
Or outsource to a company with expertise, don not leave the sales team or another member of staff that has little knowledge of credit control procedure to chase up your outstanding payments.

#9. Know your habitual late payers
Every company has the habitual late payers so keep close tabs on them. As soon as their account becomes overdue put on stop on it until the account is paid. If they start to make part-payments it is usually a sign that they could be in difficulty, so beware and again carry out further credit checks to ascertain current credit worthiness.

#10. Keep bounced cheques/documents/emails as evidence
Always keep records of problems and conversations as if there is a query with one invoice that is no reason to withhold payment of the whole account. Make sure that you sort queries as soon as possible. If at the end of the day you do have tried all of your resources and still not had payment it may be time to employ a debt recovery agency, it is often the case that these agencies carry out their services on a 'no collection-no commission' basis.

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