If your business is new, knowing where to start with credit control can feel like a bit of a minefield. You’re treading carefully to secure payments without severing vital customer relationships, and you’re tiptoeing around aged debt, wondering how best to secure it before it becomes a real issue.
This is entirely understandable! Credit control is a complex process that requires a careful balance of organisation, perseverance, and patience. Things can go wrong very quickly, and when they do, it can be difficult to rectify them.
With this in mind, we’ve popped together a guide to getting off to a good start with credit control.
A Beginner’s Guide to Credit Control
Block Out Time for Credit Control
Credit control is one of those tasks that tends to get pushed to the bottom of your to-do list. You either consistently run out of time to make any headway with it, or you simply dislike it and so put it off until the last possible minute.
While this is understandable, not making credit control a priority can lead to significant problems for your business. Unpaid invoices build up and quickly become aged debt – the longer aged debt is left, the more difficult it becomes to obtain. This then begins to impact your cash flow, and the entire process becomes even more challenging.
This is why blocking time out for credit control is so far up our Beginner’s Guide to Credit Control list. Dedicate a set amount of time per day or week to ensure that invoices have been raised correctly, payment reminders have been issued, and late payments have been followed up. This way, you won’t be trying to cram a few calls in on a Friday afternoon, and you won’t have to concern yourself with built-up aged debt.
Making credit control a priority (if only for a few hours a week!) could significantly benefit your business.
Don’t Take it Personally
When payments are late or proving difficult to obtain, it can feel like a personal attack on you and your business. In turn, this may lead to feelings of frustration that could have a tendency to seep into payment chasing phone calls. While your frustrations are valid, they can run the risk of severing important customer relationships if they’re allowed to bubble over into conversation. Not only could this lose you a client, but it may also mean that they’re even less willing to pay you than before.
With this in mind, it’s important to remember that most of the time, credit control isn’t personal at all. Nine times out of ten, payments have been missed or forgotten by mistake or delayed due to heavy workload. Reminding yourself of this when making phone calls will ensure that the conversation remains calm and pleasant, upping your chances of receiving the payment you’re chasing. You’ll also ensure that customers are kept onside.
Keeping an emotional distance from credit control is definitely one of our most beneficial tips in our Beginner’s Guide to Credit Control.
Make Sure you’re Clued Up
Credit control can be complicated. With so many businesses to keep track of, invoice numbers to find and payment values to know, things can become messy very quickly. The last thing you want to be doing is making credit control calls without the correct data to hand or making mistakes when giving out information. Not only would this complicate the process further, but it could also cause further payment delays.
To combat this, it’s essential to put a system that works for you in place. Ensure that you’re storing all of your credit control information in a logical way that makes details easy to find, and make sure you know who you’re calling and what you need to ask for before you actually do it. This way, any time spent on credit control will be efficient and worth your while.
Don’t Wait for Payments to Become Late
A common credit control misconception is that you should wait for a payment to become late before you do anything about it. If we’re honest, this couldn’t be further from the truth!
Instead, sending out regular statements of account and confirming before payments are due ensures that invoices have been received and any queries linked to them are avoided. Not only does this keep everyone in the loop, but it also ensures everything is in order before payments are due, avoiding a rush at the last minute that could result in a late payment.
It really does pay to be organised – get those statements of account sent out in plenty of time!
Enlist Professional Support
The credit control process is challenging. It’s time-consuming and frustrating, and it can become a real source of stress if an effective system isn’t being utilised. The good news is, however, you don’t need to handle your credit control by yourself if you don’t want to.
Investing in the support of credit control experts means you’ll maintain customer relationships, avoid or reduce aged debt and receive timely payments – just without all the hassle for you. You’ll also have professionals on hand who you can turn to for advice and guidance that will ensure your credit control system remains effective throughout your business journey.
There are experts out there who dedicate their working lives to supporting businesses like yours with credit control – utilise them!
Credit Control at The Edwards Company
Here at The Edwards Company, we have a team of credit control experts who can step in to support your business. Each of our team members has extensive credit control experience and in-depth knowledge of how best to approach it. We’ll effectively manage your credit control from our West Midlands based offices, leaving you to get on with what you do best – running your business.