As Sir Richard Branson once said, “Never take your eyes off the cash flow because it’s the life blood of business” – it is essential that your credit control processes are as efficient as they can be. Many people believe that credit control is time-consuming and drains resources of the company that are needed elsewhere – so let us help you with FIVE top tips in upkeeping a successful credit control process in your business.
1 – Stay In Contact With Your Customers
Call your customers. Drop them an email. Send them a text. Keeping a personal relationship with your customers will be your ultimate goal when dealing in credit control. You want to ensure that your invoice is the on the top of the list to pay when the time comes, so a 5-10 minute conversation on a frequent basis can help you build a positive rapport with your customer, and therefore make your company be one of the first to be paid by the customer by indirectly reminding them that payment is due during the phone call.
People like people, so a positive business-to-customer relationship will enhance the likelihood of payment.
2 – Don’t Only Focus On New Customers
Whilst credit checking your new customers may be a standard process you follow, do not be ignorant to your existing customers. The cash flow of a business varies day-to-day, so it is important to complete regular credit checks on your existing customers also. By completing regular credit checks it ensures that you are aware of the financial stability of your customers which can allows you to decide on whether you should keep them as a customer going forward.
3 – Start With The Larger Balances
If you are awaiting payment for several invoices, it could be of benefit to you to focus on the larger balances that are outstanding. If payment can be made on the larger invoices, then it can uphold your cash flow whilst attempting collection on the other, smaller balances.
4 – Take A Look At Your Invoices
This doesn’t mean to simply look through them, it may be time to change your invoice template around. Is it outdated? Is it clear? By choosing to rework the template of your invoices, it can ensure that all of the important information is available and hopefully decrease the chances of excuses being made based on the invoice.
Ensure the payment date and payment terms are clear, as well as all accepted payment methods. Simultaneously it is essential that your invoice does not become cluttered to void any confusion and future disputes.
5 – Be Firm
If it gets to the stage where you have asked for the date of payment on several occasions and false promises continue to be made, then it may be time to push a little harder. Let your customer know of the consequences they may face should they continue to give false promises, or worse ignore your communications.
At this stage it is important to be aware that the relationship between your business and the customer is likely to be damaged as a result of suggesting and carrying out further action, such as court proceedings.
Call the Specialists at FJCM
If you are still unsure and feel that you may need some assistance with your credit control functions, Franklin James Credit Management can help.
From just 2 hours per month, from as little as £37.50 per hour, let us be an extension to your current credit control process.
Disclaimer: The information provided in this article represents the opinions and insights of Franklin James Credit Management Limited (FJCM). It is intended for informational purposes only and should not be considered as professional financial or legal advice. Business owners and individuals seeking financial guidance should consult with qualified professionals to address their specific financial needs and circumstances. FJCM disclaims any liability for decisions made based on the content of this article.