Post Tax Season: The Perfect Time to Revolutionise your Credit Control

As the dust settles on another tax season, businesses across the country are breathing a collective sigh of relief. But before you file everything away for another year, consider this – January’s tax round off presents a perfect opportunity to take a deep-dive into your credit control processes.

Have you had a look at your credit control processes? Perhaps, the question should be when was the last time you’ve had a look at your credit control process. As we settle into the new year, now is probably better than ever to have a look at your credit management. Your team is already in a financial mindset, and you have a clear picture of the business’s financial health.

Questions you should be asking yourself

• Who are we extending credit to?

• Are the clients all on the same payment terms?

• Who are the regular late payers?

• What are their reasons for paying late?

• What can be done to close that gap between invoice due date and payment date?

What is a credit control process?

Credit control processes are part of a business’s procedures to acquire payments which are owed. To increase sales, many businesses will extend credit to their clients. An invoice will be created but the client will have already received the goods or services. They are then given a set number of days to pay this back. If they don’t, this is where your credit control process comes in.

Here are some things which might be included in a credit control process:

• Timely invoicing: A prompt invoice can be the difference between catching a company before their payment run or missing it until the next week or month.
  

• Reaffirm your payment terms: Sometimes your clients need a reminder of payment terms. You’d be surprised how often we’ve phoned up and the customer had the wrong payment terms on their system!
  

• Chase BEFORE the invoices are due: An invoice doesn’t have to be due for you to chase and make sure the client has got a payment date for you.
  

• It should be easy to pay you: Hiding your bank details amongst the legalese of your invoice won’t make it easy for clients to quickly get your invoices paid. Make it as obvious as possible. Better yet, having clear payment links like card payment services such as Stripe or GoCardless are a great way for clients to pay you in one click.
  

• Maintain your customer relationship: Without it, you won’t be getting much business. Sometimes all it takes is being nice over the phone.

There are long term benefits too!

Implementing a robust credit control process now will yield significant benefits throughout the year:

• Improved cash flow

• Reduce your exposure to bad debt

• Clear and regular communications will create better customer relationships

“But I don’t have time…”

We often hear this from business owners. Credit control is usually one of the many tasks that businesses are unable to complete throughout the working day. And when you do have a bit of breathing space, it’s probably not the best time to be chasing for an invoice.

No one wants to be called at 4:58PM on a Friday!

This is where outsourcing comes in. An outsourced credit control company can slot right into your newly updated credit control process (or even help with creating one.) Whether it’s just to chase very overdue invoices or do it all, from invoicing to statement runs to chasing the overdues, an outsourced credit control company can do just that.

Lucky for you, we know the perfect outsourced credit control company.

Drop us a call on 01209 823118. We’d love to have a chat with you all things credit control.