7 Steps to Successful Credit Control

1. Know your customer – trap key information from the start

  • Due diligence – ensure they exist, what legal entity they are, credit checks, ability to pay, check Google for any adverse publicity, etc.

2. Effective payment terms & conditions

  • Set out & agree robust payment terms in advance, include ‘late payment fees’ clause & right to add interest.  Recommend taking appropriate advice – ensure customers can’t wriggle out of payment!

3. Invoice correctly and promptly

  • Ask customers what information they need on their invoice in order to pay you, ensure accurate invoices go out on time to facilitate payment on time.

4. Monitor debtors

  • Monitor aged debt report & debtor days ratio, follow up invoices with account statements (can use this is a promotion opportunity to cross-sell other products/services, too)

5. Chase late payments immediately

  • Make immediate contact, be a pain in your customer’s bum!  Don’t let them get away with anything.  That money is rightfully yours and they owe it to you.  They’ll prioritise you when they know you mean business.

6. Go legal if necessary

  • Strict process to follow – always assume will end up in court (usually the threat of court is sufficient) as need to prove to court you have taken all relevant steps & followed procedure.

7. Never ever give up!

  • Some companies have success recovering debts years later so never, ever give up!

What experiences do you have of successfully managing your credit control?  We’d love to hear your stories and share your successes for others to learn from!  Please drop us a note below 🙂

 

Interested in becoming more financially savvy?

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Contact andi@andilonnen.co.uk for more details or call 07921 252758.  We look forward to hearing from you!