It’s never easy to run a business. But it’s especially difficult to continue serving customers and make a profit when inflation hits an all-time high, which is what happened in the UK towards the end of last year…
A few months on, the economic landscape remains somewhat bleak. Although it looks like the country will manage to avoid a recession in 2023, many customers are still struggling to pay for essential goods and services.
All this disruption is bound to have taken its toll on many organisations’ cash flows. And many business owners will likely have had a rude awakening about their organisation’s financial health during end-of-tax-year reviews.
Still, you can turn it all around with good credit control.
By ensuring you get paid on time, every time, you can combat the effects of inflation, get your ducks (the financial kind) in a row and operate more effectively — whatever the current and future economy throws at you.
So, if your cash flow could do with a bit of help (which is the case for most businesses in this economy), now’s the time to take a long hard look at your credit control strategy, work out what’s holding you back and learn how the credit control experts can set you up for success.
Signs there’s room for improvement
There are plenty of signs your credit control strategy is lacking and preventing you from thriving as a business.
Do you regularly hear ‘I didn’t receive the invoice’ or ‘The cheque got lost in the post’? If so, your customers might be making up excuses to make you extend their payment deadline or let them off without a late payment fine.
So, how to stop them from getting away with it?
Call clients to confirm they’ve got their invoice, encourage them to use online banking, send paper bills with recorded delivery and enforce your late payment policy — sometimes you need to be strict!
Another tell-tale sign your credit control needs a revamp is having a long list of customer debts that your staff aren’t sure how to retrieve — known as ‘aged debt’ — which can become a real problem for two reasons. Firstly, if you’re always scrambling to claw back aged debts, you’ll upset your customers. Secondly, if you‘re late paying your suppliers, you’ll disrupt their supply chains and risk needing to start from scratch with new suppliers that offer less beneficial terms.
The solution? Only take on credit-checked clients, monitor customer payment behaviours and ensure whoever is chasing up the debtors is doing so in a calm, professional manner that protects valuable professional relations.
You’ll also know that your credit control isn’t working if you’ve had to go to court with a debtor and even the bailiffs can’t get your money back, which can happen when customers pull a vanishing act. To prevent this from happening, you’ll need the right tracing tools and investigative skills.
Juggling all this at once can give you quite a headache. But it doesn’t have to be painful when you work with a professional credit control management company…
How the experts can help
With the knowledge and expertise to develop a comprehensive credit control policy that not only tackles late payments but prevents them from occurring in the first place, credit control companies are your best bet for tackling business debt and boosting your profits.
Trust us when we say we’ve heard every excuse in the book (and know precisely how to get reluctant debtors to cough up). We can also ensure you’re not wasting hours convincing your customers to pay you back or checking they haven’t missed an invoice.
Our help will give you back more time and energy to invest in your business. Plus, because you won’t need to deal with the debtors directly (and we’re great at customer service), there’s much less chance of your customer relationships turning sour.
What’s more, we can recommend the best late payment terms for your business based on concrete evidence, like your day sales outstanding (DSO), which tells us the average time it takes for customers to pay you back. If you’re doing okay, a more flexible policy could help keep customers happy, whereas a stricter approach may be better if you’re struggling.
Our talented investigators are also able to track down runaway debtors using extensive open research tools. This service is confidential, discrete and compliant with the Data Protection Act, so you can sit back, relax and wait for us to locate the offender. No find, no fee!
Franklin James Credit Management is a UK-based company providing businesses with effective credit control services that help prevent late payments, maximise cash flow and ensure efficient operations amidst economic challenges. Get in touch with our team via 01494 422742 or email [email protected] to learn how we can help you.