You can have the best sales team in the business and be ahead of your forecast and last year but failure to recognise how vital a role Credit Control plays in your business will eventually lead to disaster especially at times when the economy takes a turn for the worse.
Many successful small businesses have gone in receivership because they were not able to manage payment collection.
Did you know that one in four businesses fail due to late payments on their invoices? Having a successful credit control policy and procedure is critical for you to ensure the safety and future security of your business.
Top Tips for Credit Control health check for your business
Make sure your business sets out clear credit terms to your customers from the on-set
• Consider an application form, if you don’t know who you are dealing with as you could run into major problems in the future. Gather as much information before you start trading with them.
Terms and Conditions need to be set from the beginning and be available to point customers to on your web site or sent with order.
Check your Customers' Credit Score using a reputable system like Red Flag Alert and put all of your customer base on monitor and alert so you see signs of stress way in advance. Better still you can use it to find new and healthy customers to replace those that are cause for concern.
Make sure you clearly give your customers instructions of the different Payment Methods that are available to them.
Set a credit limit that is right for your business, not just what the credit maximum says and stick to it making sure that your customers pay it if they go over it.
Do you offer incentives for early payment? Ask when they do their cheque payment runs and if you have been added.
Make sure you have a CRM system that can keep track and remind you of when Payments are due. Chase payments as soon as they are overdue.
Train your staff to make professional calls to ask for payment without being rude or aggressive.
Make records of late payers and save any bounced cheques as these may have to be used as evidence.
Have a good legal option in place if everything has failed.