As a business owner, looking after your finances with credit control is one of the most important tasks that you have. If you want your business to remain in operation for many years, you need to keep on top of your company’s cash flow and ensure you stop issues from escalating too quickly. One of the biggest issues we see with business owners is that they don’t plan ahead to avoid credit control problems. Keep reading as we share our top credit control tips or contact our debt collection agency to learn more about how we can support you in the future.
Why is Credit Control So Important?
Without money coming in for your business at all times, it can be impossible to keep operating normally as a business owner. When problems start to build up, you’ll find that they can escalate quickly and leave you in a situation where you are unable to get out of debt. When you put proper debt collection processes in place, you’ll find that you can avoid issues and ensure that you get paid on time by your clients each and every time. Small business debt collection is something we encourage any new business owner to learn more about during the early stages of running a business so that you can avoid some of the most common problems with credit control process flow.
Create a Clear Credit Control Process for Your Business
The first thing that any business owner needs to do before even making their very first sale is to have a process in place for credit control. By setting up a plan and enforcing this with your team, you can ensure you are always on top of your finances at all times. Once everyone is in agreement about the process you have in place, you’ll want to make sure your accounts team is fully trained in the procedures. You have full control over the timeframe you want to put in place for invoicing and chasing up payments. In your invoices, you’ll want to make it very clear about your credit control process steps, so that clients don’t try to get away with paying late.
Get to Know Your Customers
While we all wish to trust the people who are interested in our products and services, you can never be too careful nowadays when operating in a world that consistently has troubles with fraud and debt. To avoid problems with small debt recovery, try to learn more about your customers before offering them the chance to pay for goods or services after they are offered to them. This is especially important for any payments and transactions that will be for a large sum of money, as you don’t want to do a huge amount of work to find yourself left out of pocket and unable to pay your employees. You can discuss your credit control policy during these early stages with clients, making them fully aware of your expectations when working together.
Create a Watch List
If you have clients who have paid late once or twice before, it’s time to start monitoring their activity and ensure they don’t become problem clients in the future. Creating a watch list or a stop list is a good way for your whole team to be on the same page about the credit control process for troublesome clients. We recommend having a process in place that will help you to determine when you stop working with a client if they are too problematic for you to risk putting your time and effort into serving them in the future.
Keep on Top of Your Invoices
While clients are often to blame for late payments and issues with credit control, you also need to play your part in ensuring they pay on time. We recommend having a process in place where your team invoices clients immediately once your work is complete or the product is received. From there, you need to make sure you follow up on time with late payments each and every time. When you communicate with your clients, make sure the payment terms are laid out very clearly on each invoice. You don’t want them not paying simply because they didn’t know where to send the payment to or how to get in touch with your team.
By following these top credit control tips, you can work to avoid issues with late payments and keep your cash flow in a good place year after year. Our team will be here to support you should you find you are dealing with unpaid invoices and will be happy to advise you about the best solution for the current issues you are facing. Contact us today to learn more about the services we offer or to discuss the topic we’ve shared here.