It’s essential to keep your cash flow healthy if you want to stay in business for the long term – and if you’re a business that extends credit to customers in any form (even delivering goods or services before invoicing for them), you’ll need to stay on top of your credit control too.
Whether your new customers are B2C or B2B clients, you should run a basic background check. There’s no stigma associated with doing so any more; businesses will probably be expecting it, and consumers are familiar with it as part of credit applications, and even when setting up a new utility bill.
You can even make the customer do some of the work, by having them fill in an application form with clear contact details, employment circumstances, banking information and so on.
Terms and Conditions
Clear written payment terms protect you if a customer fails to pay on time or at all, so make sure you have terms and conditions, and make sure you provide these to new customers from the outset.
This is also your opportunity to state any additional penalties for non-payment, or incentives for early payments, so it’s a great chance to set out your stall as regards your approach to credit control.
When you issue an invoice, make sure it is full and correct, sent to the right named recipient, and double check that it has been received for processing.
Include your terms and conditions again, and there can be no doubt as to the customer’s obligation to pay in full and on time, or what might happen if they fail to do this.
Remember, invoicing is the single most crucial element of admin you will ever do – it is the one act that turns the work you have done into money you are tangibly owed – so get this one thing right, and the rest should follow.
Find out more about our credit control services or call us on 0808 115 0675 to speak to one of our specialist credit controllers.