Top Tips for Credit Control and Debt Recovery

Good Practice

When carrying out good credit control, where is the line between being clear and being rude?  Well, after being a commercial debt collector for more years than I care to remember (or to put in black in and white!) in my view there is no place for the latter and every need for the former.

In my experience though many debtors perceive clarity as rudeness, perhaps because they are feeling defensive?  However, effective credit control is all about clear, unambiguous communication both verbally and in writing.

Part of the secret to getting paid on time is to be explicit with your customers about what you want and what, if they have signed your terms and conditions, they have contracted to.

When you first open an account, advise the new customer what their credit limit is and when their payments must be made by.  Also tell them what the sanction will be if they don't adhere to your terms.  Will they have to pay late payment interest, or go on stop?   Will you pass the account out to a commercial debt recovery agency? Will you, ultimately, take legal action?  

Make sure that your invoice has arrived with your customer, "Hi it's George from George & Sons, just checking that you have got our invoice and that it is being processed for payment by the thirtieth? You have? Great. Have a good weekend, are you going to watch the game?" Suddenly credit control does not have to be hostile, it can be used as an opportunity to build and enhance relationships with your customers.

Creditserve Collections is a good debt recovery agency, I think, one of the best.  But by the time you have to pass a debt out for collection, even to the best agency, you will have missed so many opportunities to get paid.  Don't wait until a customer is late paying you before you contact them.

So be clear, be proactive and if all else fails ring Creditserve Collections on 01992 414222 for expert debt recovery, credit control out-sourcing and credit control advice.

5 New Years Resolutions for Credit Control

1. Implement a Credit Policy for the business or review the current credit policy to ensure it's right and is working as good as it could be.

Many businesses don't have a credit policy and if that applies to you and your business then you should really implement one.

If you have one then you should regularly review it and ensure it is working for you.

A credit policy is a set of rules and criteria that you should follow when taking on new customers and considering extending them credit.

2. Ensure you have good / solid paperwork including terms and conditions as to ensure you are covered for Kate or non payers.

3. If extending credit ensure you use the minimum days of credit that you can get away with, to ensure you don't struggle with cash flow. Don't just put invoices on 30 days as normal, try 7 or 14 days and see what they think. Paying late by 30 days on a 7 day invoice is far better than being 30 days late on a 30 day invoice.

4. Rather than offering credit try taking payment upfront. This sounds like a simple idea but some sales people get on to bad habits and just offer payment terms as standard but on many of these occasions business would be happy to pay upfront on company credit cards, so try and get sales guys to change their ways and adapt to taking payments online or as part of cash collection implement processes of trying to take the payments upfront after the sales or orders have been completed.

5. Implement good solid credit control processes and procedures including wherever possible the use of automated systems to allow you to free up more time to get on the phones and collect any money due.