10 Tips For Avoiding Credit Control Mistakes
Here Are Ten Of Our Best Tips For Avoiding Easy Credit Control Mistakes.
Have Clear Payment Terms
Make sure to always include your credit terms when sending an invoice. To avoid a customer missing a payment, display the payment date in a prominent position to let them know exactly when a payment must be received. This will reduce the chance of your customer missing the deadline date.
Know Who Handles Payments
When dealing with large companies, the person you are corresponding with is often not the person in charge of sending payments through. Make sure to address invoices to the most relevant person, and ask if you’re unsure, as confusion can lead to delayed payments.
Invoice Straight Away
As soon as your goods or services have been supplied, follow up with an invoice. Any delay gives your customer an excuse to stall payment.
Implement Strategies For Late Payments
Set out a day-by-day strategy to target late payments. Train staff to appropriately manage outstanding invoices so that the strategy is maintained.
Have A Dedicated Credit Controller
Many businesses forgo an in-house credit controller due to lack of capacity or requirement, but that often leaves existing employees to take over where they’re not best trained. In acquiring a dedicated credit controller, no time is taken away from employees’ primary roles, and you can ensure that you’re getting the best results possible.
Credit Check New And Existing Customers
Less than 50% of businesses credit check customers, setting them up for business with companies that might not successfully uphold credit agreements. Use credit reports online that allow you to instantly review a company or director’s credit rating online, which will help you make quick, informed decisions with the lowest risk of late payment.
Offer A Range Of Payment Options
When you give customers a choice of payment type, it makes it easier for them to complete payments and increases chances of them paying on time. Make sure to clearly detail all options on your invoices.
Set Credit Limits
To stop customers from purchasing more than they can afford, set credit limits using information gained from credit reports. Offering higher credit late payment carries higher risk for you and your company.
Stop Supplying Late Payers
Be sure to catch persistently late payers to establish accountability with their company. Some suggest placing the worst offenders on a ‘stop’ list to ensure their supply of services provided are halted until all outstanding invoices have been settled.
Review And Update Terms & Conditions
Take the time to regularly review your terms and conditions to ensure that you are keeping up with your business’s constant changes. Make sure they are successful and adjust accordingly to improve your cash position.
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