Choosing the right Credit Controller
Firstly choosing the right Credit Controller for your business is important.
As a result sometimes when work gets busy one of the things that can get delayed is the sending out and chasing up late payments.
Being more DOG about it means being more proactive with your debtors, so you don’t have to worry about them delaying payment on invoices or causing cash flow problems.
Read more to find out how we can help you be more DOG!
Decide who does your credit control
- First and foremost, it’s important to have the people in charge. Character and personality are vital traits. Most of the time a gentle nudge is all that’s needed, other situations may be more challenging.
Credit controllers need to be thick skinned, consistent, tenacious, firm, fair and confident.
- Remember chasing up late payments can be an unenviable task. It can be extremely taxing, and at times quite isolating. A credit controller may not at the top of the popularity charts.
Likewise the people selected need to be firm, keep on message, but adapt to the change of tone in a clients’ voice. It is not uncommon for a conversation to rapidly change once money is the subject of the conversation.
Organise your credit control
Firstly, Credit control needs to be organised and having a process to deal with it is good practice.
- Ensure you have a credit policy in place. Most noteworthy this will include who you give credit to, for how long, credit limits and consequences of late payments.
- When will you send out invoices, at the end of a week, end of a month? Our advice is to send them as soon as the work is done, products delivered, but do it quickly. Clients typically count credit days from when they get the invoice.
- Have a system in place that flags up late payments. We find Xero cloud accounting a great resource for all the aspects of credit control. Multiple ways to issue invoices; automated reminders can be set up, reports showing who owes what, and how late. Xero is a power tool
- Ask your accountant for help in managing your credit control
- Make a note of how you will deal with late payments- maybe send a couple of reminder emails then follow this up with a phone call if you do not get a reply
- If you are going to allow payment plans get them in writing!
Going- keep your credit control on track
Above all however, you decide to handle your credit control – keep GOING with it!
Hence consistency is the key:
- Communicate terms of business
- Send invoices out promptly
- Monitor when they are paid
- Keep an eye on agreed payment plans
- Deal with late payments
Finally remember that D.O.G.s (Decide Who-Organisation-Go) works well with C.A.T.s (Culture-Action-Tools)
Get in touch with us to find out more about Choosing the right Credit Controller and how we can help. For more business and finance , news, advice and tips, don’t forget to watch our weekly broadcasts, listen to our weekly podcast I Hate Numbers.