Keeping on top of your accounts payable means more than just chasing overdue invoices, and detailed credit control reports give you a great insight into exactly where your company finances stand at any given moment.
Credit control reports go into detail – as much detail as possible – about clients, how much they owe, and when it’s due, including how overdue it is.
Rather than doing this on an individual invoice basis, it’s sensible for larger companies to aggregate the data to an extent, as this can give you an easier overview of your position.
So how do you lay out credit control reports?
First of all, it’s usually sensible to list all of your individual clients by name, in a logical order – alphabetical is the most obvious, but you might have other preferences, for instance, grouping clients who are on the same payment terms as one another.
After that, it’s simply a case of aggregating all of each client’s invoices according to when payment is due.
You should include a full total of how much is owed, followed by a breakdown of sums that are not yet due – i.e. you have invoiced, but the deadline has not arrived yet – and those that are up to 30 days overdue, 30-60 days overdue, and so on.
These time periods are of course optional, so if you would benefit more from 0-7 days, 7-14 days etc instead, naturally you should use those boundaries instead.
You should be left with a table that lets you know at a glance if a particular client has a disproportionate sum owing well past its due date, and by totalling each column, you can see how well your credit control is working overall.
Being able to track your performance with reports in this way is part of the admin side of credit control, but it’s worth the time and effort for the returns you will achieve.
Over time, your totals should shift towards the left-hand side of your table – signifying payments made early, on time, or within just a few days of overdue.
If you would like to talk to someone about anything related to credit control then simply: get in touch with the CPA Team