Are you spending too much time chasing payments? It’s a common problem that can have a significant impact on your business’s financial health. Did you know that 50,000 small businesses in the UK go under each year due to cash flow problems? A large part of this is caused by late payments.

The consequences of neglecting credit control can be severe. Late payments can disrupt cash flow, hindering a business’s ability to meet financial obligations and invest in growth. Customers who consistently pay late may eventually default on their payments, leading to increased bad debts. Unpaid invoices can also strain relationships with customers and suppliers, potentially damaging a business’s reputation. Furthermore, a lack of cash flow can limit a business’s ability to invest in new products, services, or marketing initiatives, hindering the growth potential of the business.

So what are the benefits?

  • Improved Cash Flow: Timely payments ensure a steady cash flow, allowing you to make informed business decisions. By improving your credit control, you can increase your cash flow by up to 15%.
  • Enhanced Customer Relationships: A strong credit control process demonstrates professionalism and respect for your customers. It can also help to build trust and loyalty.
  • Reduced Risk of Bad Debts: Thorough credit checks and consistent follow-ups minimise the risk of customers defaulting on their payments. Implementing effective credit control can reduce bad debts by up to 50%.
  • Increased Efficiency: Outsourcing credit control to experts can free up your time to focus on core business activities. This can lead to increased productivity and improved overall business performance.
  • Improved Business Planning: Effective credit control can help you better forecast your cash flow, making it easier to plan for future expenses and investments.

So how can you ensure that your credit control is effective?

  1. Clear Credit Terms: Establish clear credit terms and payment deadlines from the outset. This helps to avoid misunderstandings and ensures that customers are aware of their obligations.
  2. Thorough Credit Checks: Conduct thorough credit checks on new customers to assess their financial reliability. This can help to identify potential risks and reduce the likelihood of bad debts.
  3. Regular Follow-Ups: Follow up with customers promptly if payments are late. A timely reminder can often encourage customers to pay their invoices on time.
  4. Use of Technology: Utilise credit control software or online tools to streamline the process and improve efficiency.

Consider Outsourcing: If you are struggling to manage credit control in-house, consider outsourcing the task to a professional credit management company, like FJCM.

But why choose FJCM?

By prioritising credit control, you are establishing a foundation for healthy business relationships. While some businesses may allocate only 3-10 hours per month for this task, is it truly the best use of your time?

At Franklin James Credit Management, we can save you time and alleviate stress. Our comprehensive credit control services, starting at just £37.50 per hour, offer numerous benefits. With our advanced software, we efficiently check, verify, and monitor customer creditworthiness. This frees up your time to focus on growing your business, while you gain peace of mind knowing that your credit control is in expert hands.

Can you afford to neglect credit control? Let FJCM help you optimise your business operations and maximise your financial success.

Contact FJCM!

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.