Why credit control is essential for your business
How much time do you spend on credit control or chasing customers for payments per month? Maybe it’s something you’ve never considered? You could be lucky in that your clients and customers all pay on time, every time.
However, let’s consider the impact of not having credit control:
- Potential cash flow problems
- If invoices are not chased, it could lead to a downward spiral for your business.
- Similarly, if 1 customer habitually pays 10 days late, it’s not such a big problem. But multiply that by 10, 20 or even 30 customers – where could it lead?
- As your customer base increases, so does the requirement to manage invoices, queries and payment reconciliation.
- However, is this an effective use of your time?
- How do you know if your customers are credit worthy and have means to pay you?
- Establishing that your client/customer is financially sound and has the means to pay, before you provide goods/services is good business. If they have a history of late payment (or even CCJs), chances are you will struggle to get paid too.
Some stats for you to consider:
- The Federation of Small Businesses state that 50,000 small firms go under each year.
- In the first 3 months of 2019, there were 320,000 CCJs, half were less than £650.
There’s no denying, 2020 has been a particularly challenging year for businesses. We’ve all seen the impact on some big High Street retailers – Debenhams, Cath Kidston and Laura Ashley, to name just 3. Don’t let yours be next.
By putting a focus on credit control, you’re laying out the rules for a good relationship with clients and customers. Some businesses require only 3 – 10 hours credit control per month. However, let’s look again at the question above: would this be a good use of your time?
At Franklin James, we can save you not only physical time, we can also save you time in terms of stress and worry. Let us take care of your credit control, starting from as little as £70 per month. Here’s some of the benefits to you:
- We have software for credit checking, verifying and monitoring customers
- Your time can be used more effectively to focus on increasing your business growth
- Stress and worry is eased in the secure knowledge that we deal with it professionally
Can you afford not to consider outsourcing credit control?