Credit Control Services
What are Credit Control Services
Providing credit today is a normal way of trading throughout all industries. Cash only business has reduced considerably. Credit control services should be a normal simple process of following up invoices issued to ensure payment is made and any disputes or problems raised by the clients are resolved speedily and effectively to avoid unnecessary delays with payments. A strict credit control service enables suppliers to have improved cash flow and allow them to function properly in today’s competitive business environment.
How To Implement Strict Credit Control System
Strict Credit control is aimed at both the supplier and the client. Firstly the supplier needs to have a working credit control system in place which is manageable for the staff members to implement. It is recommended that the supplier pre-checks all new and existing clients to establish whether they are a fair risk to warrant credit facilities. For more information on this service visit our Business Credit Reports page. It is recommended that all clients are regularly checked and many business credit reporting companies provide a FREE monitoring service. Once the clients have been vetted it is important that the system is easily operated and repeatable month after month. The basics for this system is to be consistent and almost robotic in the operation so that invoices are issued to clients in the same way every time. The payment terms remain fixed for each client unless otherwise stated. Statements are sent out on set dates and gentle reminders are emailed a few days prior to due payment dates. Prompt telephone/email follow ups are made if payments are not received on the due dates. Regular communication between supplier and client is paramount to a successful credit control system.
What to do if Payment is not received
If a client/debtor does not pay despite the implementation of a strict credit control system then the outstanding debt should be outsourced to a third party debt collection company who operate on a No Win No Fee basis charging an agreed commission against monies recovered only. In many cases the debt collection fees plus late payment interest can be added to the outstanding debt. A reliable debt collection partner can be seen as an additional credit control team who can resolve disputes and problems that the supplier is not able to do. For a step by step procedure on how to avoid bad debts click here.
Credit Control Services Outsourced
It is always best to if possible to undertake the credit control services in house as the staff and company have a better knowledge of the clients and their requirements, method of payments and abilities to pay. However, there are advantages of outsourcing the credit control service to a third party as the supplier only pays for the actual time spent on credit control duties which can be as little as a day per week or month. Also the outsourced credit controller has lesser involvement with the clients so usually operates a stricter control over the ledger and is less likely to be swayed by clients excuses for non payment.