Top Ten Credit Control Tips

Here’s what every business, small or large, should know about keeping their clients’ credit under control:

1. Application forms

You want to know who you are dealing with, so get as much information about the individual or business before you start doing work for them.

2. Credit check

It’s vital that you know the background of the person you’re working with, this information can help you decide what credit limit to set or, more importantly, whether to stay away from certain businesses altogether.

3. Set out your terms and conditions

This is your opportunity to clearly state your terms and expectations in your sales contract.

4. Check references

There’s no better way to get a sense of character than by word of mouth. Happy business associates will be genuinely pleased to sing the praises of good contacts.

5. Set a credit limit

And stick to it! If a client does exceed the limit make them pay the excess, it’s there for a reason.

6. Payment chasing should be a tight operation

Having a system that runs like clockwork is essential, be sure to make a telephone call or send a letter on day that every invoice becomes due.

7. Adding interest

You don’t have to put up with late payment. In 1998, business suppliers gained a right to charge Late Payment Interest.

8. Employ an experienced credit controller

Or outsource to a company with expertise, don’t leave the sales team or another member of staff that has no knowledge of credit control to chase up your valuable payments.

9. Know your habitual late payers

And keep your beady eye on them. As soon as their account becomes overdue put on stop on it until the account is paid. If they start to make part-payments it is usually a sign that they could be in difficulty, so beware.

10. Keep bounced cheques as evidence

Always keep records of problems and conversations as if there is a query with one invoice that is no reason to withhold payment of the whole account. Make sure that you sort queries ASAP.

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