Outsourced Credit Control

Credit Control System

Many smaller companies and businesses do not have a specific credit control department. It is often operated or overseen by another member of staff who has their own full daily duties and tries to undertake the credit control service in their spare time or when they have a few minutes. The majority of businesses prioritise sales and marketing as this is what grows the company. However, without a credit control system or credit control policy in place all the hard work of attracting sales is lost when invoices are not been paid on time or even at all. This also leads to shortages of working capital and cashflow which can seriously damage the businesses.

There are many ways small businesses can implement a successful credit control system with little or no additional costs. The first rule to a successful credit control system is implementing a strict invoicing, statement operation routine within the company. See our credit control page for methods and ideas, and tips on how to operate an ongoing credit control service.

Outsourced Credit Control

A method some businesses use is an outsourced credit control service using an external company or individual to implement the credit control system. This can prove very cost effective and successful as there is no need to employ a permanent member of credit control staff and only pay for the hours worked. This could be a little as 1-5 hours per month depending on the size of the ledgers.

When chasing overdue accounts the outsourced credit control service provide would make credit control phone calls to the customers/ debtors in the name of their client and build knowledge and relationships with the client’s debtors so that the close relationships built are not lost.

Outsourced Credit Control Service v Debt Collection Service

The main difference between outsourced credit control services and outsourced debt collection services is:

Outsourced credit control service provider is paid by the hour or the day irrelevant of what results have been achieved. Whereas the Debt collection agency would normally operate on a no win no fee basis charging an agreed commission against monies recovered only.

Whether to choose an outsourced credit control service or debt collection agency service depends on the nature of the outstanding and overdue cases.

An outsourced credit control service provider is best used when invoices are just overdue and the debtors only really need prompting or answers to any issues they have such as:

Copy invoices, amount discrepancies, service issues, etc which can be easily resolved by the company and the outsourced credit control specialist.

However, if the debt becomes further overdue and the debtor is either non responsive or not cooperative  then the company is paying an hourly/daily rate to the outsourced credit control service provider who is unlikely to resolve the issues, etc. In these cases then the debts should be outsourced to a debt collection agency who will use their skills and expertise to achieve a successful resolution for a commission based on the monies recovered only basis.