Different processes work for different people. The way you run your businesses will be influenced by your industry, your team size, your target customers, meaning that something that works for the business next door to you may be totally useless for you.
The same goes for credit control. Each business will have a slightly different procedure and ways of doing things that work for them. With that said, there are a few no-noes where credit control is concerned that you should definitely try to avoid at all costs, no matter what your business looks like.
Here are 5 things you should never, ever do when it comes to credit control:
1. Ignore It
We human beings tend to have a bit of a ‘bury our head in the sand’ affliction when it comes to doing things we don’t like doing. We’ve all done it – we tuck that one task into the back of our minds and think that if we ignore it well enough, for long enough, it’ll eventually just go away.
We’ve all learnt that this is definitely not the case, especially when it comes to credit control. Credit control is one of those tasks that, if left unattended for long enough, can cause significant issues. The odd late payment here and there will turn into frequent late payers, which will eventually turn into aged debt. When this happens, it can be incredibly difficult to get your accounts looking healthy again. You’ll have to spend a significant amount of time chasing late payers, some of whom will be reluctant to pay at all now so much time has passed, and you may find that you actually lose money in the long run.
The best thing you can do for your business is to tackle credit control head-on. Get a system put in place that works for you and follow it through regularly to ensure aged debt is being kept to a minimum and cash flow remains positive.
2. Take it Personally
As frustrating as late payments can be, it’s important that your emotions are kept out of credit control as much as possible. We know it can feel like a personal attack on your business when that late payer fails to make a payment again, but more often than not, they’ve just forgotten.
Remembering that credit control isn’t personal when dealing with late payers is a great way to avoid some of the stereotypes associated with the credit control process. Awkward phone calls, confrontation and severing customer relationships are all concerns some of our credit control clients have expressed in the past. Maintaining a level head and a polite, professional manner will ensure you get the results you need, without all the awkward bits.
3. Wait for Late Payments
While maintaining a polite and professional manner is ideal when dealing with credit control calls, that doesn’t mean you should allow late payments to continue to be late.
Being on the ball and following up immediately on any invoices that haven’t been paid by the given deadline will increase the chances of obtaining payment in a timely manner. This way, your customers will learn that if they miss a payment deadline, it will be followed up without question. If you consistently allow payments to be late, your customers may begin to think that this is okay as it won’t be chased. We already know that this can very quickly turn into aged debt that is difficult to get rid of, so it’s best to nip it in the bud before it becomes a larger problem.
You’ll probably find that a quick email or call as soon as a payment becomes late will resolve the issue.
4. Try to squeeze it into your schedule
Unfortunately, credit control isn’t one of those tasks that you can just tag onto the end of your day. A call here and there won’t make much of a difference, and you may find yourself running into issues later on down the line.
Instead, it may be far more efficient for you to dedicate a set number of hours to credit control per week. This will allow you to review your accounts accurately and make the necessary calls, without worrying that you’re running out of time. You’ll also feel far less stressed in the process, meaning you’ll be better able to keep that professional and polite manner throughout.
5. Do it yourself if you don’t want to
While dedicating a set number of hours to credit control is a great idea in theory, we understand that for many businesses, it simply isn’t possible. With a small team and a heavy workload, it can be challenging to dedicate time to credit control without taking away from other important aspects of your business. And, even if you do have time, you may not feel that you have the credit control experience necessary to get the job done as effectively as you’d like.
The good news is, you really don’t have to undertake credit control in-house if you don’t want to.
Instead, it may be beneficial to find an outsource professional who can handle your credit control processes for you. Not only will they be able to dedicate their time solely to chasing late payments and reducing aged debt, but they’ll also be incredibly experienced in doing so.
Here at The Edwards Company, for example, our credit control experts have been providing support for businesses all over the country for almost a decade. We frequently obtain late payments and reduce aged debt for our clients, meaning that they can dedicate all of their time to running their business, rather than worrying about credit control.
If credit control is becoming a chore and you feel that avoiding a few no-noes won’t make a significant difference to your credit control process, please get in touch. We have a range of flexible, affordable monthly credit control packages available, designed specifically to support businesses like yours.