Choose the right Credit Controller:
Credit control is such an important area in the business world. However it’s a subject that is all too often put on the back burner. 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.
So for that reason we have written this blog to help you through this process. Most importantly:
Previously we have written how being more C.A.T. helps you avoid late payments. So now we are writing about being more D.O.G. i.e. what you should look for in your Credit Controller team.
Therefore being more C.A.T was about Culture, Action, and Tools. Let’s explore what being more D.O.G. is about
- 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.
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.
First of all 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 is a great tool 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
- 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!
Above all however, you decide to handle your credit control – keep GOING with it!
Hence consistency is the key. Be consistent with:
- Communicating terms of business
- Getting invoices sent out promptly
- Monitoring when they are paid
- Keeping an eye on agreed payment plans
- Dealing with late payments
Finally remember that D.O.G.s (Decide Who-Organisation-Go) works well with C.A.T.s (Culture-Action-Tools)
Thanks for reading this blog and hope you found it useful.
Contact us if you want us to help you with being more D.O.G. (or C.A.T.) and deal with your business cash issues.
We can have a chat and a cup of (virtual or real) coffee, biscuit chat to see where we can help you.